With all the media coverage of the federal government shutdown, there was some news about the historic launch the California’s health care market place but details were few. So what exactly is happening?
On Oct. 1, Covered California (California’s state-run health coverage exchange), as well as other state and federally-run health care marketplaces created by the federal Affordable Care Act (ACA), officially opened their doors for enrollment. Here in California, I hear hundreds of thousands of people went online to www.coveredca.com in Covered California’s first few hours of operation to find out whether or not they can get affordable health care coverage. In searching for answers to that question, Covered California has two marketplaces: One for individuals (which is getting the lion’s share of media coverage); and a separate Small Business Healthcare Options Program, or SHOP, for companies with 50 employees or fewer.
While individuals can complete the insurance enrollment process now for coverage that would start on January 1, 2014, small businesses can begin the process of enrollment: setting up an account, checking their eligibility and getting a rate estimate from SHOP. And with the aid of an agent certified by Covered California, a small business owner can get a quote and submit a paper application now or enroll online come November.
This slight delay until November for small business enrollment should not be much of a concern because as long as health enrollment happens by the middle of December, coverage will take effect on January 1, 2014. Also, unlike the individual marketplace where consumers must purchase insurance during the set open-enrollment periods, businesses can enroll in SHOP at any time. With this ongoing enrollment opportunity, small business owners should weigh all the coverage options available, both inside and outside the exchanges, to ultimately make the best decision for their business and employees.
Why would a small employer want to consider Covered California’s SHOP? The goal is to have enough small employers in the SHOP to promote competition among insurers, thus lowering insurance premiums. It will also make it much easier for small employers, who normally lack human resources departments, to manage plans: under SHOP, business owners choose a level of coverage they want to offer, and their workers can pick among competing plans that qualify.
That said, a small employer should also compare plans offered through SHOP with what’s on the private market. Each business is different and that may be the route that makes more financial sense in the long run. Bear in mind, though, that SHOP is the only place where small businesses that purchase coverage for their employees may be eligible for federal tax credits.
Yet another option is the individual one. No employer with fewer than 50 employees is mandated to provide coverage to employees, nor will any small employer be subject to any future penalties for not providing coverage. Ensuring employees know about the individual marketplace and the subsidies they may receive there may be the better route for you and your workers.
Whether you are a fan of federal health reform or not, nobody should rush to pass judgment or claim complete victory on the ACA yet based simply on the first day of open enrollment. A staggering amount of information technology and federal/state/local agency coordination will all be required to launch the largest overhaul to the health system in nearly 60 years. What ultimately are going to be the measures of success for this undertaking are that the uninsured sign up, including healthy individuals, and that the cost of health insurance is driven down for everyone. Oct. 1 is the start of what, hopefully, will be a time when small employers and others who want health insurance will be able to afford it.