Just one in four small businesses currently offers health insurance to employees—a number that actually seems to be on the wane, according to a recent report from Mark Farrah Associates.
According to public data on small businesses, small groups with health insurance policies dropped from 1.546 million in 2012 to 1.453 million last year—a slide of nearly 93,000 groups. However, as Mark Farrah noted, the numbers mean a door has opened for carriers and independent agents.
“Nonetheless, this sizeable market remains an attractive business target for commercial health insurers,” he said.
Farrah went on to note that the delay of the Small Business Health Options program, or SHOP, may have affected the numbers and its future opening is a “potential game-changer in the small group market.”
“SHOP will allow business owners and or administrators to control the coverage level as well as the amount they pay toward coverage for their employees,” Farrah stressed. “In some cases they can benefit from a tax credit worth up to 50% on the amount they apply toward coverage depending on eligibility.”
Those credits are available for the smallest businesses—those with 10 employees or fewer whose full-time employees make less than $25,000. This is a surprisingly large group: about half the small businesses in the US meet those guidelines.
However, it won’t be an easy row to hoe for producers in some states. According to a June announcement from the Centers for Medicare and Medicaid Services, insurance commissioners in each region requested permission to limit carrier choices through SHOP to just one employer-designated plan.
The 18 states that requested and were granted a delay in offering multiple plans include: Alabama, Alaska, Arizona, Delaware, Illinois, Kansas, Louisiana, Maine, Michigan, Montana, New Hampshire, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota and West Virginia.
Options are not entirely restricted to state SHOP exchanges, however. The federal government plans to operate its small-business exchange for both the 32 states that declined to set up their own and the 18 states that will offer just one health plan. Those exchanges are set to open Nov. 15, with pilot testing in October.
You may also enjoy: "Obamacare exchange premiums will rise by this much in 2015"
"SHOP development on track, all except for..."
"ACA's pay or play rule could cost employers big"
