California has dropped a requirement that health insurance companies participating in the individual insurance exchange also submit a bid for the small-business health options program, which is known as SHOP, the Los Angeles Times reported Saturday.
Anthem, a division of WellPoint Inc., chose to drop out of the government-run exchange for small businesses that is to open Jan. 1, company spokesman Darrel Ng said.
"Because Anthem is no longer required to participate in SHOP as a condition of being on the individual exchange, Anthem has withdrawn its SHOP application," Ng said. "Anthem will continue to participate in the individual exchange."
"That's really surprising and not a good thing for the exchange," said Micah Weinberg, a senior policy adviser at the Bay Area Council, a firm that advises employers. "Anthem is a very major player in the small-group market and you want a broad range of insurers, particularly the most compelling brand names."
Anthem was the leader in the small business health insurance market in 2011 with a 31 percent market share, the Times said. Kaiser Permanente had a 28 percent market share in 2011, followed by Blue Shield of California, which had an 18 percent share.