Premiums for health plans purchased on the Affordable Care Act’s Small Business Health Options Program exchanges were slightly cheaper than plans only offered elsewhere, a recent study found.

Testifying before the House Small Business Committee last week, Jon Gable, a senior fellow at NORC at the University of Chicago, stated SHOP plans’ premiums on average were 7% lower than off-SHOP plans, citing a study of 26 states conducted this summer.

Broker Kenneth Statz, president of Statz and Associates in Ohio, has seen similar numbers in his state, saying that SHOP plans were between 3- 5% cheaper. However, Statz says, it’s important to point out that on-SHOP and off-SHOP plans offer different benefits.

Fellow adviser Joan Fusco agrees, saying richer benefits mean higher premiums.

Fusco, director of research and education at New Jersey-based Savoy Associates, disputed Gable’s findings, saying on-SHOP and off-SHOP plans cost the same. 

“We don’t like the illusion that the premium is cheaper,” she says.

In Ohio, lower rates have not enticed employers to opt for SHOP. In fact, not one of Statz’s clients has purchased a plan through the ACA program, he says.

“It still wasn’t the direction that the employer wanted to go,” he says, adding that 95% of groups he has rated and quoted benefit more by keeping their existing grandfathered plans.

No more coverage

Meanwhile, some of his small-group employer clients stopped offering coverage to their employees, Statz says. Some with 10 or fewer employees ceased coverage but offered raises, he says, allowing employees to purchase individual plans through the ACA.

It’s mutually beneficial for businesses of that size, Statz adds, as cost to employers is about the same and employees typically end up with a better plan.

Texas employers have the same attitude.

Employers there are also keeping existing plans and some small employers have stopped offering coverage while increasing wages, according to Kelly Fristoe, owner of Financial Partners in Wichita Falls, Texas.

The reason is lack of choice — Texas has just one company participating in SHOP, Fristoe says: “There’s no competition.”

Meanwhile, next month small employers and benefit advisers in five states — Ohio, Delaware, Illinois, New Jersey and Missouri — will be given early access to SHOP.

Also see: Brokers, employers granted early SHOP access in 5 states

Enrollment in those states won’t officially start until Nov. 15, but employers can use HealthCare.gov to establish a profile, assign an agent or broker to their account, complete an employer eligibility application and browse plans and pricing when they become available.

The early access initiative is designed to allow the Centers for Medicare & Medicaid Services to gather information and feedback prior to the SHOP Marketplace launch in November.

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