David Blumenthal, MD, MPP
Small oncology practices employing fewer than 50 full-time employees might consider looking to the Small Business Health Options Program (SHOP) offered through the Affordable Care Act. The SHOP program allows small companies, who often struggle to provide affordable, comprehensive health benefits to their employees, access to health coverage. Employers are eligible to receive federal tax credits when SHOP benefits are offered. Employees of small companies are likely to be uninsured or underinsured as compared to employees working in larger companies.
According to a report
from The Commonwealth Fund, 17 states and the District of Columbia run their own SHOP marketplaces. The federal government is operating SHOP marketplaces in the remaining states.
In the report, Sarah Dash and colleagues at Georgetown University’s Center on Health Insurance Reforms say that most states running their own marketplaces seek to encourage participation by focusing on features such as offering employees a choice of plans, setting a predictable contribution for employers towards employee coverage, and improving the shopping experience by providing online access to personalized assistance.
“For years, our research has shown that small-businesses owners and their employees are often priced out of the health insurance market, have very limited options when it comes to insurance, or are forced to select plans with high premiums and limited benefits," David Blumenthal, MD, MPP, the president of The Commonwealth Fund, said in a news release, while also noting that the SHOP initiative allows “small businesses to finally provide a range of affordable, comprehensive coverage options to their employees.”
According to the new study, nearly all states have attracted enough competition to offer small-business employers and employees a choice of insurers and plans. However, state offerings vary widely. For example, the Connecticut SHOP marketplace is offering 12 plans, compared to 267 in the District of Columbia. The number of insurers participating also varies, ranging from one in Washington to 10 in New York.
The report notes that small employers typically only contribute toward a single plan for all employees, which may not work with every employee’s health needs. The SHOP marketplace allows employers to offer employees a choice of plans, while making a predictable contribution to coverage, known as a defined contribution, regardless of the type of plan the employee chooses.
Depending on the state, small employers currently may enroll in SHOP plans online, directly with insurers, or through agents and brokers. For example, the 33 states where the federal government is running the SHOP marketplaces do not have online enrollment, but small businesses can purchase plans directly from insurers or through agents and brokers.
Defined contribution does not necessarily refer to the employer applying a flat dollar amount toward coverage, but typically allows employers to designate a percentage contribution toward one particular plan—known as a “reference plan”—from among the plans available to employees.
“States creating their own SHOP marketplaces understood what small business owners wanted and worked to make their marketplaces attractive to them,” said Georgetown’s Sarah Dash, the lead author. That makes monitoring how the state-run SHOP marketplaces fare with enrollment and customer satisfaction critical to see what improvements need to be made moving forward, she said.
The Small Business Health Options Program, by State
To make it easier for small employers to offer coverage to their workers, the Affordable Care Act established the Small Business Health Options Program (SHOP) marketplaces in each state. To date, 17 states and the District of Columbia have established or plan to operate their own SHOP marketplaces in 2014, while the federal government is operating the SHOP marketplace in 33 states.