Small businesses are poised to benefit from the Small Business Health Options Program but more education for small-business owners is needed, says an industry group supportive of the Affordable Care Act.
Right now, approximately 17 states and the District of Columbia administer their own the Small Business Health Options Program marketplaces, which are being touted as the small-group alternative to the public exchanges for the individual market. The remaining 33 states are managed by the federal government.
SHOP marketplaces are scheduled to be fully implemented by 2016 for employers with 100 or fewer employees. Meanwhile, four years into the ACA, less than one-third (27%) of employers with fewer than 50 employees say they understand health care reform very well or better, according to Aflacs latest WorkForces Report.
John Arensmeyer, founder and CEO of the Small Business Majority, an industry organization made up of small-business owners, says that small businesses ought to value SHOP as an option to consider and that the industry really need[s] to forge ahead with education.
The fundamentals of SHOP are sound in terms of small business needs, said Arensmeyer in a recent webinar. Its important to remember the starting point and that once the SHOP marketplaces are fully implemented, they will offer fundamentally significant benefits for small businesses.
According to the Small Business Majority, approximately 86% of small businesses dont offer health insurance due to the high cost. Moreover, smaller companies pay about 18% more for health care than larger firms, the group says.
Meanwhile, the U.S. Centers for Medicare & Medicaid Services has plans to launch federally facilitated SHOP marketplaces for states that are not running their own. Dean Mohls, director of CMS exchange policy development and analysis branch for SHOP, explains that this will happen incrementally over time with employers in three to five states having the option to establish marketplace accounts as early as October. This will allow small businesses to sign up agent/brokers, upload their employee rosters and browse available plans.
The CMS anticipates that the full SHOP marketplaces will be implemented in all states under the federal platform by Nov. 15.
In Washington, D.C. the DC Health Benefit Exchange Authority was armed with both individual and SHOP options for small businesses when it opened last October, notes Mila Kofman, its executive director. She explained that employer and employee choice was a very high priority from day one. The exchange includes 267 small group plans that are covered by Aetna, CareFirst BlueCross BlueShield, Kaiser Permanente and United HealthCare.
She adds that the majority of the first 180 employers that signed up all chose plans offered by one carrier, with 55% choosing platinum coverage and 27% going with gold. Employer size varied, but more than 80% of the small businesses have fewer than five employees.
The benefits of the SHOP, which include its single-point of entry, HR services, tax credits, all-year enrollment as opposed to the annual deadlines from the individual public exchanges, as well as the choice of plan options, should be a consideration for all benefits managers in the small-business space, Arensmeyer explains.
Its the one place out there where an employer can sign up and their employee can have a choice of a wide range of plans, he says, adding that the role of insurance brokers is importance since approximately two-thirds of small businesses rely on brokers to help them comply with the ACA.
The fundamentals are there, Arensmeyer believes. We find when we speak to small businesses [and] once they learn what the options are, they have a much [more] favorable viewpoint of SHOP.
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