Changes

Because insurance companies can no longer “conduct medical underwriting to determine the risk associated with an applicant or a pool of applicants when it priced its insurance premiums,” small businesses that choose to provide health insurance for their employees will face rising premiums and increased regulation in providing health insurance. Under the ACA, insurance carriers are no longer allowed to utilize a risk rating process to value premiums in the small business market, and only three factors may considered in determining premiums: age of the insured, place of residence, and tobacco usage. With carriers unable to rely on health factors to compute the risk of its insured, the cost of providing insurance depends on the insured’s relative age, as well as the state in which they reside in, more heavily than before. [http://www.forbes.com/sites/hollymagister/2014/04/30/5-6m-small-businesses-blindsided-by-obamacare/#fd60fda45ffe]

The SHOP (Small Business Health Options Program) Exchange, created by the ACA and intended to earn small businesses lower health insurance rates by using group plans and tax credit. SHOP offers increased employer choice functions, enabling employers to choose from a larger pool of available coverage options for employees [18] The financial advantage of purchasing insurance through the SHOP exchanges remains uncertain, however, because insurers in the marketplace will still be unable to charge premiums based on health status. Additionally, workers participating in SHOP will become ineligible for subsidies once they have to buy their own insurance [19]. Notwithstanding these limitations, SHOP offers small businesses increased buying power in the group-plan market - an advantage once possessed only by larger firms - and a simpler mechanism for comparing prices, coverage, and quality of plans [20].