Without much fanfare, the Department of Health and Human Services (HHS) opened the Small Business Health Options Program (SHOP) marketplace in five states last week after a year-long delay. HHS did this soft launch as a test before rolling out the SHOP to most of the rest of the country by on November 15. Although the action was quiet, make no mistake: this is big news for small employers and the health plans that serve them. Employers are once again faced with the tough decision on whether to continue offering benefits. And health plans have much to gain or lose in this process.
When it comes to Pay or Play decisions, health plans are also at risk, because employer decisions about this Affordable Care Act (ACA) provision will have a far-reaching impact on their business. There are billions of premium dollars at stake, potential shifts in health status, and the significant challenge of managing the Medical Loss Ratio requirements.
Any Pay or Play decisions must be approached by measuring the impact of continuing to offer group health benefits and complying with legislative mandates (Play) or exiting group health and paying the noncompliance penalty (Pay). Modeling should project the effect of the ACA regulations on employer health plan costs for 2014-2020, as well as the influence of the Cadillac tax slated for 2018, transitional reinsurance, comparative effectiveness fees, and for small employers, the value of Small Business Healthcare Tax Credits.
Now is the time for employers to tap into the right resources to make an educated Pay or Play decision. Wise health plan executives will take the lead by supporting their employer partners in this process.
Anita Nair-Hartman, Vice President, Market Planning and Strategy
Bryan Briegel, Director, Operations