Coverage is available to firms with 50 or fewer full-time equivalent employees through the SHOP Exchanges. One intent of the SHOP is to decrease small firms’ costs for health insurance coverage. From 1999 to 2009, health insurance premiums increased 123 percent for small businesses, a significant amount considering that within the United States there are 34 million employees working for 5.8 million small firms. Small firms constitute 96 percent of all firms according to the Council of Economic Advisers.
Another goal of the SHOP Exchange is to increase employee choice in health insurance plan options. “Employee choice” allows an employee to choose from several options selected by an employer from the tiered system of medical plans the SHOP offers (Platinum, Gold, Silver or Bronze). States had the option to delay that function due to concerns that it would not be fully operational by the beginning of the open enrollment period. Maine and New Hampshire opted to delay employee choice until 2016 for that reason.
As many know, the SHOP Exchange side of the Federally Facilitated Marketplaces did not open in fall 2013 when the individual exchange did. The Obama administration postponed the kick-off due to technical problems. Five test states will soon test the federally-run SHOP Exchanges under the assumption that they will be ready for the open enrollment start date on November 15. As with last year, states that do not have functioning online SHOP Exchanges for 2015, like Vermont, will permit medical and dental carriers that have approved SHOP plans to offer them directly to small businesses. Small businesses can also access those plans through producers.
Some have expressed doubt that SHOP Exchanges will be ready for November 15. Even if the five states testing results discover issues that necessitate system updates, I think it is likely that the federal government will open up SHOP Exchanges for political reasons. At Northeast Delta Dental, we currently have two SHOP groups in Maine, and none in New Hampshire. For several reasons, few small businesses have utilized the SHOP Exchange. That may change once the online function is operating.