State Exchanges overview

State Exchanges will create a challenging business environment by allowing employees to choose coverage from a variety of insurers.

Insurers face many new challenges caused by health reform and the creation of State Exchanges.It is often overlooked that small employers will be able to offer employees coverage through the SHOP component of the State Exchanges.

These SHOP Exchanges will dramatically change how employers offer coverage and how employees access their plans. Most prominently, employees will be able to choose from a variety of plans offered by many different insurers, and employers will be able to fund the coverage through defined contribution arrangements.

The illustration to the right shows how the State and SHOP Exchanges work, allowing a variety of carriers to offer competing products. Both individuals and employees (who receive employer contributions) can then purchase a policy from any carrier.

Read more about the disruption SHOP Exchanges will create