In January 2014, not only the popular Health Insurance Exchanges (HIX) but also the Small Business Health Options Program (SHOP) exchanges are scheduled to come into operation as per the Affordable Care Act regulation. Both types of insurance exchanges will operate on the same basic principle except that while HIX will primarily cater to individuals market, SHOP exchanges will mainly service small businesses.
As per a study, average annual healthcare premiums have increased by over 113% over the last decade for employer-sponsored family coverage. Small employers are unable to absorb such hikes in premiums as they are smaller in size and have less administrative spending capacity. Factors such as these has driven many small businesses to reluctantly drop their employee insurance coverage altogether. Not surprisingly, a large portion of uninsured Americans operates in the small business market.
Small businesses usually pay 18% higher premiums rates than large businesses for the same insurance policy. SHOP exchanges which will serve as online marketplaces are hoping to contain instances of employers dropping coverage by helping them avail the same benefits of high-value, low cost health plans, as are available to large employers. However, to establish successful portals states will need to bear in mind certain key points such as:
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