Small employers have usually found it challenging to offer decent group health plans to their employees. Small groups mean fewer individuals in the risk pool, and insurance companies hate risk. So in addition to creating the individual exchanges, the Affordable Care Act (ACA) also created another exchange, called SHOPs—the Small Business Health Options Program—exclusively for small employers. Theoretically, SHOPs are supposed to streamline the group health buying and administration process by allowing small employers to offer employees an array of group plans, collecting premiums, etc.
But that’s not the way it has worked out. While the individual exchanges have received a lot of attention, the SHOPs are the poor stepchildren, having received relatively little press and technological assistance.
However, the ACA contains another provision to help small employers (usually defined under state law as employers with no more than 50 employees) offer group benefits to their employees. And now is the time to explore it.
Prior to the ACA, insurers routinely set so-called minimum participation and contribution requirements, which operated to freeze out employers from the small group market. For example, an insurer wouldn’t write a policy unless, say, 75% of employees took up the coverage and employers ponied up 50% of employees’ costs. The group plans small employers could get were sometimes pretty paltry.
Under the ACA, any employer must be allowed to buy a group plan at any point during the year. That’s referred to as rolling open enrollment. But another provision applies to small employers, and it applies regardless of whether those employers get their group plans through the SHOPs.
Small employers that can’t comply with minimum participation and contribution requirements have a special open enrollment period that begins Nov. 15 and ends Dec. 15. Even better: Under the rules that apply to guarantee the availability of coverage, insurers must offer all products that are approved for sale in a state and must accept any employer that applies for any of those products.
So now is the time to stick your toe in the water and see which group policies are available.