How do Small Employers View the SHOP Exchanges?

A new study, being released today as a Web First by Health Affairs, surveyed 604 randomly selected firms--including both firms that currently offer insurance and those that do not. One clear message was that health insurance cost was by far the most important factor in purchasing decisions. Some of the study's findings:

• Employers liked features of the SHOP exchanges, including getting one bill; writing one monthly insurance check; and the ability to compare costs, benefits, and physicians in networks among plan offerings. 
• The proportion of employers willing to shift to narrow-network plans that contract with no more than 25 percent of the providers in a community rose to 82 percent with a cost savings of 20 percent. 
• Eighty percent of small-group employers offering insurance said they used brokers to perform various tasks, including selecting and managing their health insurance plans. 

The authors found two challenges to the SHOP exchanges: the need for a strong buy-in from brokers and an expected increase in the number of self-insured small employers. Under the ACA, self-insured plans do not have to provide essential health benefits or pay premium taxes. "This survey quantified a much-discussed unintended consequence of the Affordable Care Act: a movement to self-insurance, which poses a threat not just to SHOP exchanges but to the entire small-group market," the authors conclude. They recommend an amendment to the ACA: prohibiting the sale of stop-loss coverage (against catastrophic events) to small firms. This would avoid undermining many benefits of small market reforms and SHOP exchanges.