California Health Benefits Exchange
The Affordable Care Act (ACA) simplifies the process of identifying, comparing and purchasing accessible and affordable health insurance coverage by creating a marketplace called an Exchange. In California, it will be called the California Health Benefits Exchange (Exchange). Individuals, families and business will be able to purchase insurance through the Exchange. Premium assistance for individuals and families who meet specific financial eligibility requirements will also be available through the Exchange. This section addresses the Exchange from the viewpoint of Business.
At a Glance
At a Glance
The California Health Benefits Exchange will allow small businesses in California to compare plans based on price and quality. Businesses will purchase their coverage through a subsidiary of the Exchange called the Small Business Health Options Program (SHOP). When fully implemented by January 2014, the SHOP will be a “one-stop” shop to find and compare affordable, quality health insurance options. Benefits to those eligible to enroll include:
- Lower Costs: The SHOP creates a large pool of enrollees. Risk and costs will be lower because large numbers of healthy individuals offset the expense of the few who may be seriously injured or sick during any year
- One-Stop Shopping: The SHOP will make purchasing health insurance easier by providing eligible businesses with tools to compare benefits, pricing and quality as well as access to both private and public coverage options.
- Greater Benefits and Protections: The SHOP will create a health insurance marketplace that will allow employers to choose from plans offering, at a minimum, essential benefit options.
Click on the following for more information:
- What is a Health Benefit Exchange SHOP?
- Who is Eligible to Enroll in the SHOP?
- How does the SHOP make Insurance more Affordable?
- What Health Plans will be Offered through the SHOP?
- How will my business choose a Plan?
- What is California Doing Now?
- Additional Resources
What is SHOP and How Does it Work?
A Health Benefit Exchange is a transparent and competitive insurance marketplace where individuals and small businesses can buy affordable health benefit plans. The SHOP is a subsidiary within the Exchange through which business may purchase coverage.
Small employers with fewer than 100 employees may enroll in the SHOP.
The Exchange makes insurance premiums more affordable by increasing marketplace competition, spreading risk over a larger pool of individuals and by offering tax credits for eligible businesses. Competition is increased because the Exchange creates a large pool of prospective customers for participating health plans. Statistically, large pools have more healthy individuals than seriously ill or injured individuals and this is why large companies traditionally pay lower premiums than small businesses.
How to Choose a Plan
The SHOP will help you decide which plan is best for you by providing the following tools and information:
- A website that presents benefit options in a standardized format including price and quality ratings
- An electronic calculator that determines the actual cost of coverage including eligibility for premium assistance
- A toll-free hotline
HMO, PPO, or fee-for-service health plans will be offered through the SHOP. All plans must provide the minimum “essential benefits” including:
- Outpatient patient services
- Emergency services
- Maternity and newborn care
- Mental health, substance abuse, behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services
- Chronic disease management
- Pediatric services, including oral and vision care [i]
Additionally, all plans participating in the SHOP must charge the same premiums inside and outside the SHOP. They must offer at least the following:
- “Platinum” plan (highest premium/lowest co-pay)
- “Gold” plan (higher premium/lowest co-pay)
- “Silver” plan (lower premium/higher co-pay)
- “Bronze” plan (lowest premium/highest co-pay
- “Catastrophic” plan (high deductible plan for under age 30 only)
Although State-based Health Benefit Exchanges for individuals, families and business are not required to be operational until 2014, work is already underway in California to conduct necessary market research and planning. California’s Health Benefit Exchange will take what is now a very complicated and confusing process and turn it into a simple, easy to navigate experience that benefits consumers.
Federal funding will support development and implementation activities that California will undertake through 2014. Go to California’s Health Benefits Exchange website for reports on ongoing progress.
[i] Piper, K. (2010). State health exchanges and qualified health plans briefing for medicaid health plans of america . Proceedings of the San Diego Webinar, unknown URL slide 12.