Insurance Exchanges Will Help Small Businesses And Their Employees

While employers understand the value of providing health insurance to their employees, doing so can be challenging for small businesses. Small businesses lack the purchasing power of larger employers and end up paying about 18% more than larger employers for the same health insurance policy.

The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the Affordable Care Act) aim to close this gap by offering certain small employers tax credits to offset the high cost of providing insurance and, starting in 2014, offering small employers (that employed an average of 1 to 100 employees in the preceding calendar year) the opportunity to purchase private health insurance through competitive marketplaces known as Exchanges. The Affordable Care Act requires each state that chooses to operate an Exchange to also establish a Small Business Health Options Program (SHOP) to assist eligible small businesses in