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From Health Affairs:


Small Employer Views On SHOP Exchanges And Self-Insurance


Bethesda, MD -- 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? A new study, being released today as a Web First by Health Affairs, 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. Some of the study's findings:


  • Employers liked features of the SHOP exchanges, including getting one bill; writing one monthly insurance check; and the ability to compare costs, benefits, and physicians in networks among plan offerings.

  • The proportion of employers willing to shift to narrow-network plans that contract with no more than 25 percent of the providers in a community rose to 82 percent with a cost savings of 20 percent.

  • Eighty percent of small-group employers offering insurance said they used brokers to perform various tasks, including selecting and managing their health insurance plans.

Small Employer Perspectives On The Affordable Care Act's Premiums, SHOP Exchanges, And Self-Insurance


By Jon R. Gabel, Heidi Whitmore, Jeremy Pickreign, Jennifer L. Satorius, and Sam Stromberg


All the authors are affiliated with NORC at the University of Chicago.


This study, which will also appear in the November issue of Health Affairs, was supported by The Commonwealth Fund.


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 ACA, 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.

About Health Affairs

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically at The full text of each Health Affairs Web First paper is available free of charge to all website visitors for a one-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund. You can also find the journal on Facebook and Twitter. Read daily perspectives on Health Affairs Blog. Download our podcasts, including monthly Narrative Matters essays, on iTunes. Tap into Health Affairs content with the new iPad app.