Small Business Insurance Exchanges

States Must Form New Marketplaces Aimed at Helping Small Companies Buy Coverage More Easily and Cheaply.

States must form new marketplaces aimed at helping small companies buy coverage more easily and cheaply.

The Affordable Care Act (ACA) requires states to create health insurance exchanges, or marketplaces, where small businesses can review, compare, and purchase health insurance. They are one of two types of exchanges that are to be created under the law, the second of which is aimed at individuals. The small business exchanges, to be created under the law’s Small Business Health Options Program (SHOP), will offer group health plans to small companies. The exchanges are supposed to offer a variety of health plans; provide comparative information on benefits, costs, and quality; and facilitate enrollment in a plan of choice.

States have the option of creating these as separate exchanges or combining the individual and small-business markets in one exchange. Although both types of exchanges will have similar functions, they will have unique attributes reflecting the needs of the populations they serve.

This Health Policy Brief focuses on issues that states have to confront in designing SHOP exchanges, as well as challenges that these exchanges are likely to face, and was published online on February 9, 2012 in Health Affairs.