Small Employer Views On SHOP Exchanges And Self-Insurance

How will small businesses take advantage of the new SHOP (Small Business Health Options Program) exchanges, which open for business in every state on January 1, 2014? For a Web First study released yesterday by Health Affairs, John Gabel and coauthors at NORC at the University of Chicago surveyed 604 randomly selected firms, including both firms that currently offer insurance and those that do not. One clear message was that health insurance cost was by far the most important factor in purchasing decisions. The authors found two challenges to the SHOP exchanges: the need for a strong buy-in from brokers and an expected increase in the number of self-insured small employers. Under the Affordable Care Act, self-insured plans do not have to provide essential health benefits or pay premium taxes. “This survey quantified a much-discussed unintended consequence of the Affordable Care Act: a movement to self-insurance, which poses a threat not just to SHOP exchanges but to the entire small-group market,” the authors conclude. They recommend an amendment to the ACA: prohibiting the sale of stop-loss coverage (against catastrophic events) to small firms. This would avoid undermining many benefits of small-market reforms and SHOP exchanges.
Source: Health Affairs Blog - Category: Health Medicine and Bioethics Commentators Authors: Tags: Employer-Sponsored Insurance Health Reform States Source Type: blogs