THE SHOP

Restyling & Truck Accessories - May '15

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restylingmag.com May 2015 | Restyling & tRuck AccessoRies 45 by skyrocketing p r e m i u m s w h e n one employee incurs an expensive treatment. That's because the ACA eliminated what insurers call "experience rating," or the assessment of premium levels by the medical history of participating employees. "Some employers had found it chal- lenging to provide coverage at a reason- able cost if they'd had adverse health experience among their employee population," says Julie Stich, director of research at the IFEBP. "With pre- mium reform, adverse experience can no longer be taken into consideration and can no longer jack up premiums." The disappearance of experience rat- ings also has resulted in an overall lev- eling effect. "Before the ACA, employers with healthier employees would have seen premium discounts, while employers with less-healthy employees would have seen premium surcharges due to poor experience," Stich says. "After the ACA, some employers that had previously received discounts may be seeing increases. Those who had pre- viously seen surcharges may be seeing lower costs or cost increases that aren't as high." SHOP & Save The ACA provides employers with sev- eral resources and advantages. One is the dedicated Internet-based insurance marketplace called The Small Business Health Options Program, or SHOP. It's available to employers with 50 or fewer full-time workers. (To access SHOP, go to healthcare.gov and click on Small B u s i - nesses.) "For smaller employers, SHOP is a great resource," says Kaya Bromley, an Incline Village, Nev.-based attorney who counsels employers nationally on the ACA. "SHOP allows them to get the pricing that only larger employers enjoyed before." The SHOP exchanges were originally scheduled to open in late 2013, but were delayed until late 2014 while ener- gies were devoted to fixing the public exchanges for individuals. In many states, employers were required to fill out paper applications. The inelegant process led to dismal results. California, for example, signed up 1.4 million people through its public exchange but only 11,500 employees and dependents through its SHOP exchange. "SHOP certainly has been slow growing," Eastaugh says. "The program is barely working in 15 states. Perhaps it will get up and running in 10 more sometime in 2015." Even in the 15 states where SHOP is working, it is not picking up much market share. "In those states there is an average of one employee signed up through a SHOP program for every 100 people signed up on the state exchanges," Eastaugh says. One reason SHOP has been slow to catch on is because word has not yet gotten around. "Many employers still do not know anything about SHOP," says Bromley. "Also, they are accustomed to working with brokers, and those brokers will lose their com- missions if they encourage employers to go to the exchanges." Another problem with the nascent SHOP program is the lack of econo- mies of scale. The small businesses who patronize SHOP do not have enough employees to attract competi- tive pricing from insurance carriers. Whether that problem will be miti- gated in the future as the SHOP par- ticipation grows remains to be seen. Tax CrediTS Many small employers enjoy another ACA benefit: the tax credit program intended to assist organizations that offer their workers health insurance. These credits are available for employers with fewer than 25 employees and average wages of less than $50,000 a year. The credits are worth up to 50 per- cent of employer contributions to employees' premium costs, and the pro- gram is good for two consecutive years. Employers desiring to take advantage of the tax credits must offer coverage through the SHOP marketplace. Despite the allure of tax credits,

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