Small Business Yawns for Obamacare

Most of the attention in Obamacare has been on the "individual mandate" — the requirement that people carry insurance — and on the state and federal health exchanges set up to help the uninsured buy coverage. But the Affordable Care Act also envisioned covering more people through their workplaces. Small businesses, which are not required to cover full-time employees, often do not. The Affordable Care Act created a parallel exchange called the Small Business Health Options Program, or SHOP, to make it easier and more cost-effective for small businesses to insure workers.

The small business exchange in New York has been slow to pick up steam, however, with about 10,000 enrollees, as of June, compared to 370,000 enrollees in the individual market and 590,000 enrollees in Medicaid. New York’s goal is to insure 450,000 people via the SHOP exchange by 2016. To do so, enrollment will need to pick up considerably.

New York has made more headway than most states — as of June, there were about 76,000 SHOP enrollees in the entire country, according to the U.S. General Accountability Office — but the program as a whole has received relatively little interest so far for a number of reasons: it’s optional, not mandatory; most small businesses that insure employees typically use brokers, and brokers as a whole appear to be ambivalent about selling clients policies via the government exchanges; those employers who don’t cover employees because it’s too expensive are not finding enough savings and tax incentives on the SHOP exchange to change their minds.

Donna Frescatore, director of New York state’s health exchange, said her agency and its contractors will spend more time this year reaching out to small businesses and insurance brokers. She is hoping to get their attention with advertising and direct mail campaigns.

“We are pleased with the rollout of the SHOP program, and we’re looking forward to increasing enrollment as we move into 2015,” she said.