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Navigating health insurance for small businesses

Nancy Marshall-Genzer Dec 16, 2014
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Navigating health insurance for small businesses

Nancy Marshall-Genzer Dec 16, 2014
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This is Mike Brey’s busiest time of year. 

Brey owns four Hobby Works toy stores in Maryland and Virginia, and he’s got about 50 full- and part-time workers. He huddles with one at his store in Laurel, Maryland, in an aisle jam-packed with remote-control cars. They’re talking inventory.

Brey is just getting over a cold. There’s no time to sleep around the holidays if you own a toy store, and no time to look over health insurance plans – one of his least favorite chores.

“Yeah, I hate it,” he says.

Still, Brey does provide insurance for his employees, even though he doesn’t have to, because he has fewer than 50 full-timers. Brey leads me to his back office and computer, where he’s been noodling around on Maryland’s SHOP website, which was set up under the Affordable Care Act to connect small businesses with health insurers.

“There we go,” he says, clicking on the site and reading. “See details of SHOP plans for 2014 coverage.”

Brey says he used to have only a couple of plans to choose from. But on the SHOP exchange, “You have CareFirst offering, Coventry, Evergreen, Kaiser, United.”

But here’s the thing: Brey’s just browsing, not buying. And he’s not alone.

“It’s been, admittedly, a little slow getting out of the starting gate,” says Sabrina Corlette, a senior research fellow at Georgetown University’s Center on Health Insurance Reforms. 

She says there are a number of reasons enrollment in the SHOP exchanges isn’t taking off. They’ve had technical problems, and a tax credit small businesses get for using SHOP is hard to apply for.

“I’ve heard from some small businesses that they’d have to pay their accountant and broker more than they actually would get back in benefits,” she says.

Still, there is some evidence that businesses could get a deal on SHOP. 

“We found, in general, that plans on the SHOP cost less than those off the SHOP,” says Jon Gabel, a senior fellow at NORC, a University of Chicago research center. “Could be 9 percent lower on average.”

Still, Gabel says, it’s too soon to say whether the SHOP exchanges will survive.  

But Brey hopes they stick around. He says he’ll start some serious insurance shopping after the holiday rush.

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