SHOP Health Insurance Marketplace Opens for Small Businesses

Small Business
shop health insurance small business

For the first time, small business owners around the country can now conveniently compare and purchase health insurance packages for their employees through the new Small Business Health Options Program (SHOP) online marketplace.

SHOP, which was mandated by the Affordable Care Act, went online Nov. 15 on Healthcare.gov.

Before its launch, SHOP had been available through paper applications submitted to agents or brokers, a process that some business owners found cumbersome. Now that the website is up and running, paper applications will no longer be accepted. Enrollment for SHOP is open year-round.

John Rood, president of the Chicago-based Next Step Test Preparation, already provides his eight full-time employees with health insurance he purchased through an insurance broker. But he logged on to the government-sponsored website last weekend to check out the SHOP options.

“I haven’t made the final decision to switch yet,” he says. “I’m interested in seeing if there are better prices for similar levels of care.”

SHOP lets businesses with 50 or fewer full-time employees compare and purchase insurance plans. Employers with fewer than 25 employees are also eligible for a tax credit worth up to 50% of their premium contribution.

The federally facilitated SHOP marketplace is available to employers in 33 states. The other 17 states and the District of Columbia have chosen to set up their own statewide exchanges, which can be accessed through links on Healthcare.gov. While offering health benefits isn’t mandatory for employers with fewer than 50 workers, it helps attract talent.

“I think it’s absolutely a cornerstone of being competitive as an employer,” Rood says.

The Centers for Medicare and Medicaid Services (CMS), which oversees the SHOP marketplaces, doesn’t have data regarding federal SHOP enrollment yet, Shelby Venson, a CMS communications officer said in an email. Enrollment for the 18 individually run SHOP exchanges was “significantly lower than expected” prior to the launch of the online marketplace, according to a report by the U.S. Government Accountability Office earlier this month.

“My sense is that very few businesses know about the SHOP marketplace,” says Erik Rettig, northeast outreach manager of the Small Business Majority, a national small business advocacy organization. “I think once businesses know about SHOP, they’re going to be excited to jump on board and at least peruse their options.”

The SHOP website opened early in five states—Delaware, Illinois, Missouri, New Jersey and Ohio—to let business owners test the site before its launch. Rood tried logging on during this early access period but says he got an error message. But when he logged on again the day open enrollment for 2015 coverage began, he says it was “a fantastic experience with no hiccups or speed bumps.”

Rood says he will take more time to consider his options and talk to his employees before deciding to switch to a plan through the government marketplace. Like many small business owners, the final decision will come down to affordability.

“Ultimately, business owners are practical,” says Michaela Hahn Burriss, the Small Business Majority’s Ohio outreach manager. “They do what makes the most sense for their businesses.”


Healthy business illustration via Shutterstock.