Affordable Care Act

The Basic Facts

Small Business – Insurance Exchanges

Beginning in 2014, small employers seeking health insurance coverage for their employees will be able to use ACA’s SHOP exchange. The SHOP exchange is designed to assist small employers and their employees with the purchase of health plans offered in the small group market.

Only qualified small employers and their qualified employees are eligible to obtain coverage through a SHOP exchange health insurance plan. Enrollment in a SHOP exchange begins in October 2013 for the 2014 calendar year. A “small employer” is one that has less than 50 employees. A “mid-sized employer” is one that has between 50-99 employees. A “large” employer is one that has 100 or more employees.

A SHOP must allow certain “employer choice” functions, thereby enabling an employer to select from a variety of coverage options to make available to its employees. According to an HHS final rule issued on June 4, 2013, however, a SHOP will not be required to carry out the employer choice function (i.e., offer more than one plan) until 2015.

Note that small employers are not required to obtain health insurance coverage for their employees through a SHOP exchange; ACA explicitly states that enrollment in exchanges is voluntary, and no individuals or small employers may be compelled to enroll in exchange coverage.

Read more on small business employers here.