NY Small Business Health Options Program

What is the Small Business Options Program? (SHOP)

It appears that there will be 4 health plan models available for small and mini employers to choose from. It is still not clear which health insurance carriers will participate in the exchange program and there have been some rumors that some of the largest carriers have opted out due to cost and pricing restrictions

A preliminary study was conducted by Wakely Consulting Group on behalf of New York State about the popularity of these health plan models for small employers. Companies surveyed were in the small group market (11 to 50 employees) and the mini group market (2-10 employees).

The Multi-Issuer/One Tier model was the least appealing for employers, regardless of the size of their company or whether they were located upstate or downstate. Only 8% percent of employers preferred this model as their first choice. This model will not allow employees to purchase higher or lower coverage levels, so it may be restrictive for groups with a wide range of coverage needs.

The One Issuer/Multi-Tier model was the second most popular; 20 percent of employers said it would be their first choice if offered. This model would give employees the choice of plans from the same insurance carrier but at different metal levels. This model was viewed as uncomplicated and straightforward. Mini-groups (26 percent) were more likely to choose this model than other small employers (16 percent).

The Multi-Issuer/Multi-Tier model allows employers the flexibility to offer a choice of various health plans or limit employees to a single plan. 12% of employers chose this model as their first choice, and approximately one-half said this would be their second choice. Small employers (10 percent) were more likely to choose this model as their first choice than mini-groups (5 percent).

The Full Menu model was the top choice for the most employers, both mini groups and small groups. 60% of employers said they would offer this choice do to the flexibility of the available health plans. This model mirrors what is available today in the group health insurance marketplace and is not much of a surprise that employers would choose this model.

Each health plan model that will be available on the SHOP exchange must adhere to the guidelines of the Health Care Reform act within the 4 metal tiers of Qualified Health Plans (QHP’s). For more information about Metal Tiers, go to this blog post..