What is The Small Business Health Options Program?
The Small Business Health Options Program (SHOP) was created by the Affordable Care Act (ACA) to help small businesses have better options to buy group health insurance through the state health exchanges.
The concept behind setting up a SHOP exchange was to allow small business owners to become part of a much larger risk pool – eliminating the current problem of smaller companies having to pay more for health insurance.
In theory, the SHOP program should “level the playing field” and give small business owners an insurance marketplace where they can compare plans and make informed decisions about healthcare for their employees.
Beginning in 2014, health plans offered on the SHOP exchanges will be classified with “Metal Levels” – Bronze, Silver, Gold and Platinum. Bronze plans will be designed with the lowest monthly premium and highest cost sharing—such as higher deductibles, coinsurance and higher copayments. Platinum plans will have the highest monthly premium and lower cost sharing responsibility for the insured.
Each metal level health plan will offer a certain percentage of coverage as to how much the insured is required to pay for medical services. For instance, at the bronze level, the insurance carrier would pay 60 percent of health care costs while the insured would be responsible for 40 percent.
All insurance companies that wish to compete on the exchanges must adhere to certain levels of required coverage based on the provisions of the Affordable Care Act and all plans must include “essential health benefits” such as emergency care, maternity care, and prescription drugs.
How will New York Business Owners Benefit from SHOP?
New York employers will be allowed the following choices for their healthcare needs:
- Employers will be able to select one or more of the metal plan levels and offer each plan design to their employees
- Employers can select a single health insurance carrier and have their employees choose from any metal level plan that the carrier offers.
- Employers may have the option to choose a single metal plan for their employees. (The New York exchange is also considering an “employee choice model” that would allow employers to reimburse a percentage of premiums to the employees so the employees could choose from all or any of the available plans).