Private Sector Coverage: Marketplaces and SHOP

Health Insurance Marketplaces

The ACA created new health insurance marketplaces (also referred to as health insurance exchanges) as a way for consumers to easily compare and purchase available plans based on price, benefits, services, and quality. The ACA required marketplaces to be operating in every state by October 1, 2013. States chose to run a state-based marketplace, partner with the federal government in a partnership marketplace, or allow the federal government to run their marketplace (a federally facilitated marketplace). State-based marketplaces have the flexibility to make operational decisions, such as governance structure and organizational structure. Health insurance plans that do business in the marketplaces (referred to as qualified health plans) will provide essential health benefit coverage and be subject to certain limits on cost sharing. In addition, marketplace-based health insurance coverage may be more affordable for certain individuals through federal tax credits paid in advance to help subsidize monthly premiums and cost sharing reductions. However, as federal officials continue to release guidance on this new program and states continue to make policy decisions, concerns related to benefit packages for kids and affordability have emerged. These concerns are discussed in the Implementation Issues section of this Toolbox.

Small Business Health Options Program

The Small Business Health Options Program (SHOP) is designed to help qualified small employers facilitate the enrollment of their employees and their dependents in qualified health plans offered through marketplaces in the small-employer market. States have the option to create separate marketplace entities to serve the individual and small-employer market or to combine these entities as long as adequate resources are available to both markets.

NASHP Resources

Health Insurance Exchange Basics: This NASHP brief sets forth the major requirements in the ACA as related to marketplaces.

State and Partnership Exchange Policy Decisions Chart: State Refor(u)m compiles states’ latest decisions regarding marketplace implementation.

Other Resources

The Children’s Partnership provides recommendations for ensuring best health coverage outcomes for children and families to the California Health Benefit Exchange Board’s Stakeholder SHOP Workgroup.

Governance Issues for Health Insurance ExchangesThis National Academy of Social Insurance report outlines the options for state marketplace governance and the advantages and disadvantages associated with each.

Health Insurance Exchanges: New Coverage Options for Children and FamiliesThis Georgetown University Center for Children and Families brief discusses the implications of states’ marketplace design choices on children and families.

Health Insurance Exchanges Under the Patient Protection and Affordable Care Act (ACA): This Congressional Research Service report for Congress outlines the minimum functions of marketplaces and explains how they are expected to be established and administered under the ACA.

Let’s Keep Talking SHOP: This Commonwealth Fund guest blog post discusses a number of SHOP-related issues.

State Health Insurance Exchanges and Children’s Coverage: Issues for State Design DecisionsThis National Governors Association brief outlines key considerations for states as they design their health insurance marketplace.

State Health Insurance Exchange Laws: The First GenerationThis Commonwealth Fund brief analyzes legal action taken in 13 states and DC towards establishing a state-based marketplace.

Recommendations for Serving Children & Youth in the California Health Benefit Exchange: This letter from California children’s advocacy organizations highlights key policy recommendations for ensuring that the marketplace meets the needs of children and youth.