With a focus section centered around health care in this edition, the Business Examiner reached out to the community to speak with entrepreneurs participating in the SHOP exchange — the government-launched program designed to simplify buying employee health insurance for small business owners.
One problem: there don’t appear to be very many.
Mirroring the nation as a whole, South Sound small business owners seem to be passing on the SHOP, short for the Small Business Health Options Program. Washington is one of 17 states operating its own state-run SHOP marketplace online, while 33 other states allow businesses to purchase coverage through the Affordable Care Act’s online enrollment website.
The upshot to buying through SHOP lies in the tax credits that business owners might qualify for — tax credits that, in some cases, may be worth up to half of their contribution toward employee premiums. There are strict requirements for eligibility: credits are only available, for example, to firms with fewer than 25 workers, with an average salary of $50,000 a year or less.
It’s those limitations that seem to be narrowing the SHOP’s usefulness. Those limitations are compounded by the fact that, presently, only one carrier is available on Washington’s SHOP exchange: Oregon-based Moda Health, which was previously a dental insurance company but rebranded to expand its reach both geographically and outside of its industry specialty.
“And in many cases, employers are being required to set up accounts on the exchange a month before they’re even getting renewals or quotes from other carriers in the rest of the market,” said Chris Free of Tacoma’s Rapport Benefits Group, who spoke with Business Examiner Media Group in October, shortly before the SHOP Exchange launched.
“Many employers are simply saying, ‘Well, there’s one option in the exchange and a dozen options outside of it. I’m not going to skip all those other options. They’d rather forgo the exchange to wait and see the other 12 options that are available once rates were issued by other carriers.”
Couple those constraints with the perception of extra complications for little financial return, and the result appears to be a barren roster of South Sound participants in the exchange.
The Washington Health Benefit Exchange, responsible for the operation of the WashingtonHealthPlanFinder online marketplace, has been tight-lipped about the actual number of enrollees so far, but local brokers are reporting a dearth of participants.
“We are set up with the SHOP and I attended an event to promote the SHOP, but we have yet to enroll anyone in the SHOP,” said David G. Maddock of Fife’s Maddock & Associates.
Maddock, a past president of the Washington Association of Health Underwriters, is one of seven brokers the Business Examiner spoke with in the region who haven’t had any takers when it comes to enrolling in SHOP.
“I’ve asked about 10 brokers and all of them said they didn’t enroll a single group,” echoed Free.
Their observations confirm a report from the Wall Street Journal earlier this month on the scant small business enthusiasm for SHOP, citing the United States Government Accountability Office’s description of national sign-up numbers as “significantly lower than expected.”
Locally, it doesn’t help that the plan Moda is offering on SHOP is also available through the company outside of the exchange, with the exact same rates. With tax credits perceived by many to not be worth the trouble, some companies may simply be choosing to skip the headaches of signing up online to opt for Moda’s plan without dealing with the SHOP hassle.
As it turns out, even brokers are snubbing SHOP.
“I made the decision to avoid the SHOP for small group business,” said Dan Eich of Tumwater’s Oak Insurance Services, “as it added a layer to an already complex process and only had one insurance carrier participating.”