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Regulation and Compliance > State Regulation

Washington state SHOP exchange attracts one carrier

By Allison Bell

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The board of the Washington Health Benefit Exchange is thinking about pushing the start date for the state’s Small Business Health Options Program (SHOP) exchange to Oct. 1, 2014.

The board of the state’s SHOP exchange, or small business exchange, is considering that option because only one carrier, Kaiser Permanente Northwest, has made a firm commitment to participating in the SHOP exchange, and that carrier has only a limited geographic network, exchange officials said in a report posted on the program’s website.

The board staff talked about possible responses to carriers’ lack of interest in participating in the SHOP exchange in the first year in another document on the site.

The other option would be to open the SHOP exchange Oct. 1, 2013, with Kaiser acting as the only coverage provider, officials said.

The Patient Protection and Affordable Care Act of 2010 (PPACA) requires the U.S. Department of Health and Human Services (HHS) and state regulators to open exchanges, or health insurance supermarkets, for individuals and small groups in all states and the District of Columbia, by Oct. 1, 2013, with the first coverage sold through the exchanges to take effect Jan. 1, 2014.

States can choose between running their own exchanges and letting HHS provide, or help provide, exchange services for their residents.

The HHS federal plan exchange application deadline was April 30, and HHS has not said anything about how many carriers submitted applications.

The discussion in Washington state does not appear to involve the state’s individual health insurance exchange.

In Washington state, seven carriers originally expressed an interest in participating in the state’s SHOP exchange, two with drew, and one carrier that definitely wants to participate — Kaiser — has a network in only five counties.

The SHOP exchange itself will be ready to open Oct. 1, 2013, and managers are expecting that SHOP enrollment at the end of 2014 would be only about 17,000 officials said.

A number of carriers will be selling non-exchange small-group plans in 2014, officials said.

One question is that it’s not sure how small employers would use the PPACA tax credits they are supposed to get through the SHOP exchange system in 2014 if a state does not have a working SHOP exchange in 2014, officials said.

The Internal Revenue Service still has to rule on whether small groups can get the tax credit outside the exchange system, officials said.

Washington state is not requiring carriers to participate in the SHOP exchange, but, in states where HHS is running a federally facilitated exchange (FFE), HHS is requiring carriers with a market share of 20 percent or higher to participate, officials said.

One advantage of opening the exchange with Kaiser as the only coverage provider would be that other insurers would get a chance to see how the exchange system works, officials said.

The exchange board staff has supported the idea of opening the SHOP exchange Oct. 1 with Kaiser as the only carrier.

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