The February issue of Health Affairs includes several articles on the Small Business Health Options Program (SHOP), the exchange to be established for small employers in 2014 under the ACA. Timothy Jost of the Washington and Lee University School of Law reviews the current state of insurance market for small employers and explores how the SHOP exchange might improve coverage options. “Exchanges also potentially offer an advantage that has been missing not only from small-group but also from many large-group insurance markets: employee choice,” he writes. Even so, he concludes, “Although employee choice is attractive in theory, in practice it has proved difficult for small employers to manage, particularly during open-enrollment periods, when employees need information on multiple plans. Price continues to be the most important consideration for small businesses; choice is less important.” 

Jon Kingsdale, the founding director of the Massachusetts Connector exchange, “critically examines the rationales that have been offered for a SHOP exchange,” states a short summary of his article in the journal. “The primary reason that small businesses do not offer health insurance to their employees, he argues, is not lack of availability, because there is in fact a thriving commercial market for small-group coverage. Rather, it is cost. Unless exchanges can make a business case for their ability to bring down the cost of insurance, they will not succeed.” Another article by research analysts at the Urban Institute “analyze[s] several key design options being considered, using the Urban Institute’s Health Insurance Policy Simulation Model: creating separate versus merged small-group and nongroup markets, eliminating age rating in these markets, removing the small-employer credit, and setting the maximum number of employees for firms in the small-group market at 50 versus 100 workers.” The authors find that “merging the small-group and nongroup markets would result in 1.7 million more people nationwide participating in the exchanges and, because of greater affordability of nongroup coverage, approximately 1.0 million more people being insured than if the risk pools were not merged.”

In another paper, Terry Gardiner of the Small Business Majority writes about “Past and current exchanges provide valuable insights into the role exchanges can play, services they can offer, and design features that can make them successful.” In his brief, William Kramer of the Pacific Business Group on Health touches upon whether employers will move part-time workers and retirees into the exchanges. Researchers at the Johns Hopkins School of Public Health describe "why the Affordable Care Act could lead to favorable or adverse risk selection across plans. It reviews provisions in the act and recent proposed regulations intended to mitigate the problem of risk selection.” Finally, an article by Mark Hall of Wake Forest University explores the issue of stop-loss coverage, “which self-funded employers rely on to protect their businesses from catastrophic medical costs incurred by one or more insured workers.” Hall argues that “Aspects of the reform law could motivate small businesses to self-insure, rather than participate in state-regulated markets either inside or outside the new health insurance exchanges. If younger or healthier groups self-insure, premiums for insured plans might rise to an extent that could seriously impair the regulated market,” and advocates for state regulation of stop-loss coverage.