The Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended) includes a number of provisions intended to improve access to health insurance coverage. Some of these provisions apply to the small group market to address perceived problems in the market, including lower offer rates among smaller employers and the cost of coverage. The small business health options program (SHOP) exchanges are among these provisions. SHOP exchanges are marketplaces where private health insurance issuers sell health insurance plans to small employers. All SHOP exchanges are administered in one of three ways: solely by a state, solely by the Department of Health and Human Services (HHS), or by HHS with some degree of state involvement. All health plans sold through a SHOP exchange must be certified as qualified health plans (QHPs). ACA and its implementing regulations include some prescriptive requirements for the establishment and operation of SHOP exchanges. These requirements often apply similarly to SB-SHOPs and FF-SHOPs. When ACA and regulations are not prescriptive, decisions about the establishment and operation of SHOP exchanges are left to a state or the entity administering the SHOP exchange (e.g., HHS). As a result, not all SB-SHOPs and FF-SHOPs share the same features or implement shared features in the same way. This report describes certain features of SHOP exchanges. Each description includes information about how the feature is implemented in SB-SHOP and FF-SHOP exchanges. Each description also includes information about the timing of implementation. The report concludes with a discussion about the current and future place of SHOP exchanges in the broader context of the private health insurance market. In order for an employee to be eligible to obtain coverage through a SHOP exchange, a SHOP-eligible employer must offer the employee coverage. An FF-exchange will certify a QHP for the individual market only if the issuer meets one of the following conditions:
the QHP issuer offers at least one small group market QHP at the silver level and one at the gold level through the state's FF-SHOP; the QHP issuer does not offer small group market plans in the state, but another issuer in the same issuer group offers at least one small group market QHP at the silver level and one at the gold level through the state's FF-SHOP; or neither the QHP issuer nor any other issuer in the same group has a share of the small group market greater than 20% (as determined by HHS).
The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) includes a number of provisions intended to improve access to health insurance coverage. Among these are provisions that apply to the small group market to address perceived problems in the market, including low offer rates among smaller employers and the sometimes prohibitive cost of health plans available in the small group market.
The small business health option program (SHOP) exchanges are among the ACA provisions directed at the small group market. SHOP exchanges are marketplaces where private health insurance issuers sell health insurance plans to small employers. All health plans available through SHOP exchanges must meet certain federally required criteria, such as offering a standardized package of benefits. Certain small employers may be eligible to receive tax credits toward the cost of coverage if they obtain coverage through a SHOP exchange.
A SHOP exchange is currently in operation in every state; some are administered by states, while others are administered in part or in entirety by the Department of Health and Human Services (HHS). ACA and its implementing regulations include some prescriptive requirements for the establishment and operation of SHOP exchanges. Although these requirements often apply uniformly to all SHOP exchanges, in some instances that may not be the case. For example, some requirements apply only to SHOP exchanges administered by HHS and not to SHOP exchanges administered by states. When ACA and regulations are not prescriptive, decisions about the establishment and operation of SHOP exchanges are left to a state or the entity administering the SHOP exchange (e.g., HHS). As a result, not all SHOP exchanges share the same features or similarly implement shared features.
This report describes certain features of SHOP exchanges, such as employer eligibility, methods for selecting health plans offered through SHOP exchanges, and how health insurance agents and brokers interact with SHOP exchanges. Each description includes information about how the feature is implemented in SHOP exchanges administered by states and those administered in part or in entirety by HHS. Each description also includes information about the timing of implementation. The report concludes with a discussion about the current and future place of SHOP exchanges in the broader context of the private health insurance market.