For years, small businesses have been at a disadvantage compared to larger firms when it comes to offering insurance to their employees. To remedy the situation, the Affordable Care Act institutes small-group insurance market reforms and puts into play an idea that has been around for a long time but has never before been tried nationwide: allowing small businesses to pool their purchasing power through Small Business Health Program (SHOP) marketplaces. SHOP marketplaces promise small employers features they say they want but typically have not been able to obtain, such as the ability to give their employees a greater choice of plans and make a predictable contribution towards coverage.  To date, 17 states and the District of Columbia have established or plan to operate their own SHOP marketplaces in 2014, while the federal government is operating the SHOP marketplace in 33 states.

In our latest issue brief for The Commonwealth Fund, we found that states sought to promote predictability and value for small employers in their SHOP marketplaces. Most offered a competitive range of insurers and plans and allowed employers to give their employees plan choices while setting a predictable contribution toward coverage. States also sought to facilitate the small employer shopping experience through online tools and access to personalized assistance.  While SHOP marketplaces are in different phases of development across the country, their launch offers policymakers an important opportunity to identify successful strategies for improving the accessibility and affordability of coverage in the small-group market.

To read the issue brief, Implementing the Affordable Care Act: State Action to Establish SHOP Marketplaces, visit the Commonwealth Fund website.