The Evolution of the ACA Small Business Health Exchange

January 17, 2024by Alex Strautman

America was introduced to the Small Business Health Options Program (SHOP) by the Affordable Care Act. The program gives small-scale employers the ability to purchase employees’ health insurance affordably, flexibly, and conveniently.

The ACA allows three options for SHOP coverage:

• A state-based Marketplace (19 states + DC in 2024);
• A state-based Marketplace using the federal platform (three states);
• The federally facilitated Marketplace (29 states).

California’s state-based Marketplace for employers is Covered California for Small Business.

SHOP initially was an option for businesses with up to 50 full-time or full-time equivalent employees. However, four states expanded their “small group” definition to 100. That includes California, Colorado, New York, and Vermont.

Covered California for Small Business offers coverage through four health plans:

  • Blue Shield of California
  • Health Net
  • Kaiser Permanente
  • Sharp Health Plan

Four levels of health coverage are available: Bronze, Silver, Gold, and Platinum. Your business can offer two adjoining levels of coverage to employees. For example, a Silver plan with an option for employees to “buy up” to the Gold tier.

The breakdown of carriers and plan options for 2024 through Covered California is as follows:

  • 26 coverage choices from Blue Shield
  • 19 coverage choices from Health Net
  • 30 coverage choices from Kaiser Permanente
  • 18 coverage choices from Sharp Health Plan

For plan specifics, link to the Covered California for Small Business web page.

SHOP Coverage Alternative

Before the ACA and SHOP came into existence, there was CaliforniaChoice. The CaliforniaChoice private health exchange for small business began in 1996.

It offers everything you and your employees want from a benefits program. That includes access to eight health plans and 130+ coverage options through a single program.

Depending on where you live, you may be able to choose from:

  • Anthem Blue Cross
  • Cigna + Oscar
  • Health Net
  • Kaiser Permanente
  • Sharp Health Plan
  • Sutter Health Plus
  • UnitedHealthcare
  • Western Health AdvantageChoose from HMO, PPO, EPO, and Health Savings Account-qualified coverage.

Defined Contribution lets you choose how much you contribute to employees’ premiums. You can select a Fixed Percentage (50% to 100%) of a specific benefit or a Fixed Dollar Amount for each employee (the same amount applied to each).

Options are also available for Dental, Vision, Life, and Chiro & Chiropractic.

CaliforniaChoice’s Business Solutions Suite gives you access to a Flexible Spending Account for employees, Cal-COBRA or federal COBRA billing services, and a Premium Only Plan (POP).

Through the Member Value Suite, your employees have access to Dental, Vision, and Hearing services plus savings on Rx, wellness products, fitness memberships, entertainment, and much more.

No matter how many employees you have, you’ll get a single, consolidated monthly bill from CaliforniaChoice for all coverage. We also make it easy to manage your employees’ benefits through a single website:

Act Now to Get a Quote

To find out more about Covered California for Small Business or CaliforniaChoice, talk with your employee benefits broker. A broker can deliver a custom quote for your business. If you don’t already have a broker, you can search for one here.

Shopping for group health insurance?

This guide compiles a list of common questions you may have before you start offering health insurance coverage.