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Little Interest in Small Business Exchanges Thus Far

Posted in Affordable Care Act, Employer/Employee Matters, Legislation and Public Policy, Private Insurers, State Matters

An article in InsuranceNewsNet reported that only 2% of all eligible businesses have investigated small business health options program (SHOP) exchanges in the 15 states, plus the District of Columbia, where they have been available since October 2013.  SHOP exchanges were established under the Affordable Care Act (ACA).

For SHOP exchanges to succeed over the long term, they will need to attract a large pool of businesses in order to achieve the market power to force down insurance premiums.  However, for various reasons, fewer businesses than projected have needed to look for new policies for their employees.  Many employers’ renewals of their existing insurance plans just before October 2013 to avoid having to sign up for new ACA-compliant plans, and the government’s delays in implementing other ACA requirements, are cited as causes of the slow response.  Furthermore, although employers with fewer than 50 employees may purchase health insurance for their employees through a SHOP, they are not required to do so.

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