Small Businesses and Benefit Exchanges
The Patient Protection and Affordable Care Act, enacted in 2010, was implemented to address issues surrounding the access to, cost and quality of health care coverage. As part of this act, public benefit exchanges will be set up to in each state and must be in place by 2014. Public benefit exchanges can help employees who do not receive group coverage through their employment, to access a variety of health plan options. Employees are able to enter specific search criteria and data regarding themselves and their family. This data is then used by the exchange portal to help generate a number of benefit options for which the individual is considered to be eligible for. The exchanges will also generate a number of federal assistance programs that the consumer may also be eligible for.
Public benefit exchanges are also beneficial for those who do not have access to the Children’s Health Insurance program or Medicaid, and the plans offered by the exchanges will be qualified health plans and will meet new regulations under the ACA. In addition to benefit exchanges for individuals, there will also be programs set up for small businesses and employers who wish to provide group coverage. These exchanges will be known as Small Business Health Options programs (SHOPS). Historically, small businesses may have worked with brokers to choose the most appropriate plans for their employees but they may have been restricted to from limited options. SHOPs will now provide small businesses with more cost effective options, allowing companies to choose two or more plans allowing them to provide their staff with more flexible options. SHOP programs will not replace private exchanges but they will allow employers to access tax credits and other assistance programs.
Both individuals and small businesses will find that choosing a health care plan under public benefit exchanges will be an easier process and may also offer lower premium rates. Moreover, plans will not only be regulated to meet new federal requirements, but they will also be quality assured. Premiums will be at a set rate rather than being based on the health status of the consumers participating in the plan which will help to greatly reduce the cost of purchasing these plans and to avoid discrimination. In addition to this standardization, consumers will also have access to customer service support. Of particular interest for small businesses are how SHOPs will automate accounting, billing, and collection, allowing employers to pay monthly premiums in one single invoice, despite accessing plans from several carriers. This will greatly reduce the time and costs associated with this aspect of benefit administration. Companies will be required to continue to manage their benefit administration and should therefore determine how utilizing these new exchange programs may influence their current administrative processes.