June 19, 2012: The implementation of the Small Business Health Options Program (SHOP) remains one of the most complex and least understood aspects of the Patient Protection and Affordable Care Act. To help provide clarity to state policymakers, employers, brokers and health plans, the nation’s leader in developing and administering health insurance exchange programs has issued a white paper offering a five-step strategy to help make SHOP exchanges successful and self-sustaining.
“SHOP exchanges represent a unique opportunity to promote new choice-based products for small employers,” said Ron Goldstein, president and chief executive officer of CHOICE Administrators, the parent company to CHOICE Administrators Exchange Solutions, which authored the paper. “SHOPs offer a vehicle to target employers not offering employer-sponsored insurance and to use PPACA tax credits and new products to make offering such coverage more attractive and affordable.”
The PPACA requires states to create SHOP exchange programs to help small employers access affordable insurance for their employees. However, the development and implementation of these programs is often a daunting task for state policymakers who are usually more familiar with Medicaid pricing and access issues than they are with the nuances that accompany commercial small group products and pricing. “Our new white paper is designed to simplify the process by highlighting the key ingredients that will make a SHOP exchange successful while meeting the needs of all stakeholders,” said Goldstein.
Those ingredients, according to Goldstein are:
1. Know your customer – Actionable market research will allow a state to understand the basic characteristics of purchasers and influencers in the small group market and then segment that market into meaningful buyer categories.
2. Promote cost effective products – Realistically or not, small businesses expect SHOPs to offer lower-cost health insurance products. States need to work with health plans to uncover ways to provide products with lower price points while driving value for members.
3. Easy and simple administrative experience – SHOPs must create an easy user experience by developing a portal that makes quoting, enrollment, administration and renewals transparent and intuitive.
4. Build stakeholder support – SHOP exchanges have a number of key stakeholders, including employers, employees and dependents, brokers and navigators, health plans, federal and state regulators, and many others. SHOP management needs to understand the issues of each of these constituencies and find ways for mutual support.
5. Create a marketing plan – SHOPs need to develop and be prepared to implement a solid marketing plan that encompasses product development, distribution, sales, research, branding and advertising. This plan must include market segmentation and product and service differentiation while establishing metrics for measuring result.
The complete white paper – entitled: “Implementing a SHOP Exchange: A Five-Step Strategy for States” – is available at www.choiceadminexchanges.com. It is the latest in a series of white papers developed by CHOICE Administrators Exchange Solutions as part of its ongoing effort to help educate the market on the federal mandate that requires all states to develop and launch a health insurance exchange by January 1, 2014, or default to a federal fallback program. Other white papers, also available at the CHOICE Administrators Exchange Solutions’ website, include “Essential Health Benefits: Key Issues for States,” and “State-Based Health Reform: A Seven-Step Strategy.” CHOICE Administrators Exchange Solutions also conducts webinars and educational sessions for brokers, underwriters and others interested in learning more about health insurance exchanges.
CHOICE Administrators Exchange Solutions is a division of CHOICE Administrators and part of The Word & Brown Companies, the nation’s leading developer and administrator of consumer-choice exchange models. Among the exchanges currently operated by CHOICE Administrators are the CaliforniaChoice® small group (2-50 employees) and mid-market (51-199 employees) private exchanges; HSA California; Choice Builder, the nation’s first ancillary benefit exchange; and Quotit, one of the nation’s largest individual/family proposal and online enrollment systems that generated nearly 22 million individual health quotes in 2011. Other CHOICE Administrators products include Kaiser Permanente Choice Solution and Contractors’ Choice.