If your business has 50 or fewer full-time equivalent employees, you have the option of purchasing your group health insurance through the Marketplace. By 2016, the Marketplace will be open to businesses with up to 100 full-time employees. By 2017, the Marketplace will be expanded to include businesses with more than 100 full-time employees
For businesses eligible to enter the Marketplace, purchasing insurance there is not a requirement, and there are advantages and disadvantages to consider.
Inside the Marketplace:
Access to tax credits: Marketplaces may be attractive if your business is eligible for the Small Business Health Care Tax Credit. The tax credit is only available to employers with fewer than 25 employees, and only available for plans purchased through theSHOP Marketplace.
Limited responsibility for employee benefit management: In some states, starting in 2015, Marketplaces will eliminate the need for small businesses to track which health plan designs each of their employees selects. Employers may provide a defined contribution for all employees, and then let employees make decisions to best meet their personal needs. Note: The Employee Choice option is not yet available in Idaho, Montana, or Oregon.
Outside the Marketplace:
If you don’t qualify for the small employer tax credit, you may find more choice and less complexity by purchasing coverage direct from an insurance company, without using the Marketplace. That’s especially true if you already have group coverage and you’d like to stay with the same health insurance company.
Wider selection of plan design options: On the existing market, you’ll have access to all the plan designs available through the exchange (and at the same rates), plus additional options. Health insurers are limited to a fixed number of plan designs at each metal level through the Marketplace, but there are no such limits outside the Marketplace. Some insurance companies have decided not to participate in the Marketplace and are only be available outside the Marketplace.
Ability to avoid re-enrollment and disruption of services: If you already have group health insurance and want to stay with the same insurer, you’ll find it easier to do so outside the Marketplace. You’ll be able to move to a new metal level plan design with your current insurer without re-enrolling your employees. You’ll also have uninterrupted access to your insurer’s member services, such as claims history, wellness tools, and condition support programs. If you re-enroll through the Marketplace, it’s likely that your group number and employees’ existing member profiles – including member ID numbers and access to claims history in the insurer’s online member tools – will be lost, even if you re-enroll with the same insurer
Ability to build your own plan package: By purchasing coverage directly through an insurer, you may be able to build a more complete benefit package. Insurers may offer coverage for alternative care, adult vision care, and other options that may not be available through the Marketplace.
Single-source benefit administration: This is an important consideration if you currently offer integrated or consolidated benefits, such as group dental and vision coverage, from a single insurer. For example, if you purchase medical coverage through the Marketplace, vision coverage directly from an insurer, and dental coverage directly from a different insurer, you will administer three separate enrollment processes, three bills, and three sources for questions and assistance. Choosing a single company can streamline those administrative processes and simplify employee enrollment by working with a single insurer outside the Marketplace.