We’ve said all along that the individual exchange would be popular and the SHOP exchange would crash and burn. Today we got even more evidence of that – the online enrollment for the SHOP exchange has been delayed until “sometime in November” according to administration officials. This follows an announcement that the “employee choice” feature of the SHOP exchange would be delayed until 2015.
In contrast, the individual marketplace, according to HHS, is still scheduled to go live just 5 days from today.
Some believe the SHOP (Small Employer Health Options Program) exchange – which has attracted very little interest from insurance companies and even less interest from small employers – would be killed completely if the ACA didn’t require small business tax credits to be distributed through the SHOP exchange.
Because there’s really no reason for small employers not claiming a tax credit to participate in the SHOP, the administration expected much of their core enrollment to come from low-income small employers. But the number of small groups claiming the tax credit is also significantly lower than expected, and many of these groups will make the decision in 2014 to drop their coverage altogether so their low-paid employees can access the generous tax credits in the individual market.