Date: Feb 02, 2014
February 2014: The PACA Is Here to Help

Dear Jon,

Are the small business health insurance exchanges up and running?

— Wondering in Westmorland


Dear Wondering,


The short answer: some state exchanges and the federal exchange are open but the federal small business health insurance options exchange has limited enrollment options for small businesses.  Online enrollment is unavailable until at least November 2014.

The health insurance exchanges were created through the passage of the new health care reform laws (Affordable Care Act).  Health care reform requires every state to either create its own exchange, partner with the federal government and share the tasks associated with operating an exchange, or step aside and allow the federal government to operate an exchange within its borders.

Each exchange has two facets: (1) an individual exchange where individuals and their families may shop for and purchase coverage; and (2) a small business health options program (or “SHOP”) where small businesses with 50 or fewer full-time equivalent employees may purchase coverage.  The federal exchange is commonly referred to as the “Marketplace.”  Each state that sponsors an exchange has a unique name.  For example, in California the exchange is called Covered California.

The Marketplace was to be fully operational by October 1, 2013.  Most states chose not to operate an exchange, which dumped a colossally complicated chore on the federal government.  Heaped on top of this chore and adding insult to injury was the utter failure of, the federal government’s online portal designed to process online enrollment for the Marketplace.  Due to the complexity of the task and technical failures, the Marketplace did not meet its October 1, 2013 deadline.

Just prior to October 1, 2013, the federal government announced that the SHOP Marketplace was unable to enroll small businesses in health coverage online but that paper applications could be accepted and that online enrollment would be available in November 2013.  On November 27, 2013, after delaying online enrollment for the SHOP Marketplace for over a month, the Obama administration announced that online enrollment for the SHOP Marketplace would be delayed for a year or until November 2014.

At this point, small businesses in states that chose not to sponsor an exchange (most states, including Arizona) may enroll in the SHOP Marketplace using a paper application or through an agent, broker or insurance company.  Online enrollment is currently unavailable for the SHOP Marketplace and won’t be available until November.

States that sponsor their own health insurance exchanges (California) are in various stages of development and some are experiencing implementation and technical set-backs.  Some are farther along than others.  For example, California’s SHOP exchange, Covered California, is accepting applications from small businesses for coverage through online and paper enrollment.  Small businesses in Arizona will be required to fill out a paper application or use the assistance of an agent, broker, or insurance company to get coverage through the SHOP Marketplace.  For information about a specific state’s Health Care Reform implementation please contact that state’s department of insurance.

For more information about this article or if you have other questions about Health care reform contact our team today at or 800-333-4WGA.  Write to Dear Jon at

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WG Staff Contact

Jonathan Alexander
Vice President & PCMI Compliance

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