Health care law’s exchange problems leave small-business owners in a difficult position

Evy Mages/FOR THE WASHINGTON POST - If the government’s new small business exchange was fully functional right now, Jody Manor could hunt for a better plan for his company. Next month, he will no longer be eligible to shop on the site.

David Glazier and Jody Manor each own small businesses in Old Town Alexandria, just outside the nation’s capital, and in the months leading up to the launch of the federal government’s new health insurance exchange, both were eager to see what kind of savings they could find on the new marketplaces.

It has now been six weeks since the exchange opened for business — but for Glazier, Manor and many other small employers, the wait continues.

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Healthcare.gov, the federal government’s new online insurance marketplace and the center of attention right now in Washington, houses two separate exchanges — one for individuals to buy coverage for themselves and another for small employers to purchase plans for their companies. As troubled as the marketplace for individuals has been, the small-business exchange has suffered even more technical problems and delays.

“I have created about 10 login accounts,” David Glazier, founder and president of Fleet Transportation, a luxury car service in Alexandria, Va., said in an interview. “I go back and enter the username and password, and it either locks up or says they are invalid. When I ask it to send my password, and it doesn’t send my password. It’s frustrating.”

Glazier currently offers coverage to his 25 full-time employees, but his insurance company, United Healthcare, informed him this fall that his rates would jump more than 50 percent next year. A new broker helped him find a less expensive plan with Blue Cross Blue Shield, but Glazier says the price still is not ideal, and he has been counting on the promise of even lower rates and better coverage on the federal exchange.

In addition, for the past three years, he has been taking advantage of a tax break for small businesses that offer health insurance. Starting next year, the credit is only available to firms that purchase plans through the new exchange, so if he does not find a plan through the government site, he will forfeit the tax break.

“I’m planning to wait until we can get a better idea of what small business plans will be available on the exchanges, but this is chewing up a lot of time,” Glazier said, later adding: “I have better things to do, like running by business.”

Glazier’s remarks are part of an outpouring of complaints from individual consumers and small employers about the new online health insurance marketplace, which was supposed to provide a user-friendly platform to purchase coverage but has thus far been crippled by technical problems.

It has been a particularly rocky start for the small-business side of the exchange.

Obama administration officials this spring announced that a key cost-cutting feature meant to allow employers to choose multiple insurance plans would be delayed for a year. Then, just days before the site was slated to launch in October, they announced that business owners would not be able to actually purchase plans online until the start of this month. They have since pushed that deadline back to the end of November.

The result is a small-business marketplace in which employers can browse but not purchase insurance, and they still do not know exactly when the purchasing feature will be ready. Meanwhile, some say even the browsing feature leaves a lot to be desired.

“It’s hard to connect, it’s slow to load, and once you finally get registered, it’s still hard to figure out exactly what the prices would be for our company,” Manor, who owns Bittersweet Catering, Cafe and Bakery, said in an interview. “It’s all very confusing and it didn’t answer my main question — how much is it all going to cost?”

During a series of congressional hearings recently, Katherine Sebelius, head of the Department of Health and Human Services, acknowledged that using the new site “has been a miserably frustrating experience for way too many Americans” and insisted both the individual and small-business sites will be fully functional by the end of the month.

In Manor’s case, though, that would be too late.

During the first two years, only firms with fewer than 50 workers can shop for coverage on the exchanges (the limit must rise to 100 by 2016), which were designed to drive down rates by increasing competition among insurers. Right now, Manor’s company has 42 employees, all of which are offered health insurance, but his rates have been rising and, like Glazier, he had hoped to find a better deal on the government marketplace.

However, Manor is slated to open his second restaurant on Nov. 17, just down the street from the first. In the coming week, he will have to hire another 20 or 25 workers.

If he could sign up for a plan on the exchange before eclipsing the 50-employee mark, he would be allowed to keep it as long as he wanted, no matter how large his company grows in the future. But based on the current timeline for the small-business exchange, the site will not be ready in time, and he will be stuck with his company’s current plan.

“I’m going to hire these people no matter what, and I don’t mind the expense. I think it’s my responsibility to offer this benefit to my employees,” Manor said, adding that his robust health plan has helped him retain some of his best employees. “I just wanted to see what our options would be on the exchange, and right now, I can’t.”

Manor says he will continue to offer coverage no matter what — but not Glazier.

Glazier says his soaring rates and the defective small-business exchange have forced him to consider dropping his employer-sponsored coverage and sending his workers to the federal government’s individual exchange. That side of the marketplace has suffered its fair share of technical problems, too, but unlike small employers, some consumers have been able to successfully enroll in new plans through the new Web site.

“I want to provide health insurance for my employees, I feel there is a moral responsibility to provide it,” Glazier said. “But now that they can go on these new markets and find affordable plans themselves, I have to challenge that responsibility, especially if I can’t get online and use the small-business site.”

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