The SHOP (Small Business Health Options Program) is the small business component of Covered California, the state’s health insurance exchange created under the Affordable Care Act (ACA). While providing health insurance is not required for small businesses (fewer than 50 fulltime equivalent (FTE) employees), the SHOP Exchange is a large purchasing pool available to small employers that would like to provide health care to their employees. The materials released today (August 1, 2013) by Covered California show the following:
- There are substantial premium savings in most of the six regions reported through SHOP: ranging from 28% in San Francisco, to 13-17% in Los Angeles and 12% in San Diego.
- Three large statewide plans (Kaiser, Blue Shield and Health Net) are participating, as well as three strong regional plans (Western Health Advantage, SHARP and Chinese Community Health Plan).
- SHOP will offer employer choice of the level of coverage (platinum, gold, silver or bronze) and the percentage of cost the employer prefers to pay (e.g. 50% to 100%) and the “anchor” plan.
- Employees may then choose the plan and type of plan product; they cannot choose to upgrade or downgrade to a different level of coverage. For example, in Los Angeles, a small business employee can choose among Kaiser, Health Net or Blue Shield. They can also choose among PPO, HMO or HSA (Health Savings Account) types of coverage. Employees pay the incremental cost difference between the anchor plan selected by their employer and the plan they have selected. They experience premium savings by choosing plans less costly than the anchor plan.
- The increased (35% to 50%) refundable tax credits for low wage (average wages less than $50,000) small (less than 25 FTE’s) employers are only available in the Exchange.
The full information on premiums will be available October 1, 2013 through agents and brokers. Covered California will announce which agents and brokers are participating next week.
The Departments of Managed Health Care (DMHC) and Insurance still have to conduct reviews of the proposed rates.