Every state will offer an Exchange through which individuals can purchase health coverage beginning January 1, 2014. If the state itself has not agreed to establish an Exchange (for example, Pennsylvania has not signed on to set up its own exchange), the federal government will come in and run the Exchange for the state.
To date, seventeen states and the District of Columbia are in the process of establishing their own Exchange, while seven states have expressed the intention of providing an Exchange in partnership with the Department of Health and Human Services. For the remaining states, the government will step in and run the Exchange on the state’s behalf.
The Small Business Health Options Program (SHOP) will eventually operate through the Exchange in all states.
This means that health reform impacts all employers in all states. All employers will have to send the federally-required Exchange notice (see our prior article, click here). This is the case even if the state’s Exchange is not run by the state itself. While large employers have a reprieve on the tax penalty associated with failing to offer affordable, useful coverage, all employers must pay attention to the changes that are coming under health care reform.
