Small Employers and the Small Business Health Options Program (SHOP)

Small businesses have struggled to keep up with the rising cost of health insurance. With fewer health plan options than larger companies, they are less likely to offer health coverage.

The Affordable Care Act (ACA) has several implications for small businesses, but one opportunity is the Small Business Health Options Program or SHOP, an online marketplace for small businesses with features designed to offer flexibility to both employers and employees.

The Issue

The Robert Wood Johnson Foundation commissioned a national study of small employers, conducted by PerryUndem Research/Communication and GMMB, to understand their feelings about offering health insurance. In particular, the study explored awareness of and interest in SHOP. It also tested its features and identified messengers to learn how best to communicate with small employers about the benefits of using SHOP.

Key Findings

• There is an awareness gap about SHOP depending on whether a business currently offers health insurance. Those who offer coverage are much more likely to say they know about SHOP before hearing a description than those who do not offer coverage (69% versus 37%).

   

• Small business owners like SHOP’s features—with the top-testing features being the tax credit and the ability to set their own contribution amount. These features were also the main reasons for small employers to use SHOP the next time they need insurance for their company.

   

• After learning more about SHOP, 8 in 10 small employers say they will look into it in the future. Whether they offered coverage or not, 84 percent said they would be willing to help employees find affordable coverage on their own. And of those who would be willing to help employees find coverage, 96 percent would encourage them to go to HealthCare.gov or their state marketplace.

   

Conclusion

Small business owners care about health coverage for their employees, and the more they learn about SHOP’s features, the more they seem to like it. There is potential for increased enrollment in SHOP but small employers need more information—particularly around the availability of tax credits to help lower the cost, the wide selection of available plans, and the option to set their contribution amount.

About the Study

This report presents findings from focus groups held in Baltimore and Salt Lake City, as well as a national survey of 821 small employers with two to 50 employees. Focus groups were held in August 2015. The survey fielded September 18 through September 29. The margin of error for the survey is +/- 3.4 percentage points. Methodology, survey toplines, and the full public use data set are also available.