Small-business Health Options Program (SHOP) Exchanges would be online marketplaces that would primarily serve small businesses and allow them to offer insurance to their employees at cost-effective rates.
Escalating healthcare premium rates has led to many small businesses reducing their healthcare budgets or ceasing to offer health insurance completely to their employees. With a large section of U.S. population employed in small businesses,
the number of uninsured citizens, therefore, has continued to rise at an alarming rate. To address this growing concern, the government introduced the Affordable Care Act under the aegis of which the SHOP exchanges were introduced.
SHOP exchanges would primarily serve the group insurance markets. All U.S. states have been mandated to set up a SHOP exchange for small businesses, either as a separate entity or merging it with the health insurance exchanges for individuals. The SHOP exchanges whether run separately or conjointly with the HIX would be web-based portals where small businesses would be able to purchase defined-contribution model based group insurance for their employees.
The deadline for setting up SHOP exchanges coincides with the January 1, 2014 deadline that has been defined for the health insurance exchanges. The primary mission of the SHOP exchanges would be to achieve the following objectives:
• Reduce the extra insurance premium amounts that small businesses need to pay and stabilize the employer group markets by reducing the instances of frequent changes in health premiums
• Help employers and their employees enjoy the same flexibility, choice and freedom in choosing health plans, provider networks, preferred insurer a privilege that has been traditionally available to large businesses but not to small businesses due to high inclusive costs
• Simplify the health insurance search, compare and purchase process for small businesses so that they can choose a health plan or service in accordance with their healthcare budget and personal preferences
• Reduce the administrative burdens that small businesses experience while selecting health insurance for their employees
• Regulate the group market and drive healthcare innovation in simplifying access, improving affordability and enhancing customer service
The U.S. government has granted states the flexibility to define the eligibility criteria for participating in the SHOP exchanges and restrict exchange eligibility to employers with 50 or less than 50 employees until 2016, if the states so prefer. Beginning 2017, if the states prefer they can open their SHOP exchanges to businesses with larger than 100 employees and run a common HIX and SHOP exchange if required.
However, all the states would be required to abide by the exchange implementation guidelines laid down in the ACA. SHOP exchanges would need to implement processes for certifying, recertifying or decertifying QHPs, provide plan information in a standardized format, offer customer service and manage enrollment periods in accordance with the guidelines laid out by the U.S. Department of Health and Human Services.
