SHOP is a flop for brokers across the nation

If you’re a broker who focused on enrolling individuals on the Affordable Care Act’s public exchanges, a sound strategy for post-March 31 would be to focus on SHOP enrollment that’s taking place year-round, right? Maybe in theory, but in reality — wrong. 

Brokers from Arkansas to Florida to New York lament that the SHOP exchanges in both federally facilitated and state-run states are undesirable targets for their clients and prospects.

“We only have a single carrier in SHOP,” says Julian Lago, an independent agent in southern Florida, a federal exchange state. “It’s Blue Cross Blue Shield and they only have a few plans. The incentives to enroll in SHOP are low — it’s only paper for the agent and really the businesses that would take advantage of the tax credit, with certain income qualifications … are very few.”

Single carrier

Lago, who serves as regional vice president for the National Association of Health Underwriters, says he’s spoken with brokers all across his state because of his position and he hasn’t heard of anyone who has enrolled a single client in SHOP. “Even if the process was automated on the website, it still wouldn’t be appealing because of the portfolio,” he says.

Joe Childers, owner of Watershed Benefits in Little Rock, Ark., is one of those brokers who adjusted his business to help individuals enroll on the public exchanges. In his state, also on the federal exchange, SHOP also only has one carrier. After March 31, he says he’ll “have to see how the market evolves.” Childers is also hoping that Arkansas’ Medicaid expansion — which was funneled into a program called the Private Option and accepts applicants year-round —is still on the table for him to enroll people into. Right now, he explains, there are naysayers in the state legislature trying to defund the platform. But in Childers’ view, it’s good for the people to get covered and good for brokers, since it’s a Medicaid program that actually gives broker commissions.

‘Afterthought’

So far, the numbers released for the state-run SHOP exchanges have been dismal. As of Jan. 17, Kentucky had 14 companies signed up, Colorado had 101, Connecticut had 106 and New York had about 5,000 employees enrolled, according to Bloomberg News. And on Feb. 3 the North Bay Business Journal reported that California, the most populous state, had enrolled 300 businesses on SHOP with a total of 2,155 employees and dependents signing on to-date.

State-run SHOPs, which have website components and typically more carriers than their federally run counterparts, still seem like an “afterthought,” says Robert Vidal, an employee benefits specialist at Professional Group Plan in the New York City area. “The individual site is a little simpler and to get an individual through the process, it’s not ideal, but the SHOP to me — there’s really no reason to do it.” He says the limited amount of plans — with only one recognizable insurance carrier out of three — small networks and a bad website have caused him to steer clear of it completely. “I’m putting them through the regular commercial group coverage,” he says of any small groups he works with.

The Centers for Medicare and Medicaid Services has not released enrollment numbers for the federal SHOP exchanges yet, and an unidentified staffer recently told The Hill newspaper that the figures will be “depressed” and not available until “later this year.”

Florida’s Lago isn’t surprised, but he also says that any brokers who have focused their business on individual exchange enrollment shouldn’t be worried about not having a solid SHOP option to rely on after March 31. “My personal opinion: I don’t think you’re going to see a huge drop off in the individual enrollment sales, because a significant amount of consumers who have purchased on the exchanges have been because of life events. There’s a small amount of enrollees who were truly uninsured,” he says.

Some potential

Jennifer Lovett, who was traditionally a small-group insurance broker but shifted almost completely to individual public exchange enrollment on Connecticut’s state-run exchange, is more confident about her prospects in their SHOP exchange. But the president and CEO of Crystal Financial Insurance Services in Hartford, Conn., says a push from her brokerage and others in a similar position might not come until April or May.

“They’ll need a little rest after individual is over … we’re working now pretty much seven days a week,” she says. “In May I think is when we’ll get antsy and pick up the SHOP portion. One sale could do a whole day’s work of what we’ve done on the individual side.”

Lovett also agrees with Lago that life events will continue to play a factor in individual enrollment and won’t drop off completely.  “We’re still going to be able to sell this year-round, just not in the magnitude it was before where they’re waiting in life for four hours to see us,” she says, referring to her presence at AccessHealthCT’s retail brokerages. “Those brokers who didn’t do this are going to be sorry.”