Do you know any small business that buys its health insurance through the SHOP exchange? No? Unfortunately, neither do I. There’s a reason for that. Most of us don’t.
SHOP stands for Small Business Health Options Program and it was established as part of the Affordable Care Act (ACA) as a place for small businesses (those of us with less than 50 employees) to go to buy healthcare policies tailored to our needs. The SHOP exchanges were supposed to offer small businesses more choices and allow us (or our brokers) to do everything online – from searching and managing our plans to paying premiums and administering employee enrollment.
It’s a nice idea. Except for the fact that virtually no one used it.
CNBC reports that only 233,000 people are covered by the SHOP plans, which is way below the 4 million people predicted by the Congressional Budget Office back at the time they were started. Of the 30 million small businesses nationwide the government says that only 8,000 are using the federally managed SHOP marketplaces and another 19,000 are enrolled in state-managed SHOP exchanges.
So, the Trump administration has announced its plans to shut down the federally managed exchanges, beginning in 2018. Those small businesses using the federally-managed exchanges would have to buy their insurance from brokers. The goal is to “reduce ACA burdens on consumers and small businesses and make it easier for them to purchase coverage,” and that it will “reduce the federal government’s role in health-care coverage decisions and make it easier for issuers to use their own enrollment systems for SHOP plans,” a spokesperson told CNBC. The tax credit available for small businesses with less than 25 employees who provide health care coverage to their employees will still be available.
The federal Centers for Medicare and Medicaid Services will accept public comments on this proposed change and could make further modifications.