Health law’s small-business exchanges not exactly a hit with owners in D.C., Maryland


In D.C. and Maryland, small businesses have not been quick to sign up for health plans through the new insurance exchanges. (J.D. Harrison / The Washington Post)

The District of Columbia’s new online, small-business health insurance marketplace hasn’t attracted very many small businesses.

Maryland, meanwhile, still doesn’t even have an online small-business marketplace.

Since the launch in October, roughly 45,000 people have enrolled in new plans through the District’s health care exchange, known as DC Health Link. Of those, about 13,000 of them signed up through the site’s small-business marketplace — the counterpart to the portal for individuals and families.

However, fewer than 600 of those people actually own or work for a small business, according to Mahlori Isaacs, a spokesperson for DC Health Link. So then, who is buying all the plans on the small business exchange? Congress.

Due to a strange provision in the health-care law, congressional staffers are permitted to sign up for plans on the city’s employer portal. Those staffers represent the remaining 12,600 enrollees on D.C’s small-business exchange.

In other words, actual business owners and their workers represent only 1 percent of the city’s total enrollment and 4 percent of the sign-ups on the small-business exchange.

Hoping to lift those numbers, DC Health Link officials last week formed a small-business task force to educate employers about the marketplace and how to enroll. Hannah Turner, manager of the city’s small-business exchange, kicked off the roadshow with two presentations last week; one at the National Press Club, the other at D.C. Del. Eleanor Holmes Norton’s Small Business Fair at the Walter E. Washington Convention Center.

“Small businesses have traditionally not had a lot of these options,” she told business owners at the convention center, noting that small employers in the past could not easily compare rates, shop online or offer different plans to different workers.

The exchange, she said, gives them “more clout with insurers.”

Still, D.C. isn’t the only one struggling to attract businesses. In California, only about 1,200 of the state’s 700,000 small firms have enrolled in plans through the state-run marketplace. In Colorado and Connecticut, which also built their own exchanges, only a couple hundred small firms signed up in the first four months.

Meanwhile, for states that elected to use the small-business portal built and operated by the federal government, such as Virginia, there’s still no telling how many have signed up.

In an e-mail, Department of Health and Human Services officials said they don’t expect to have small-business enrollment data until later this year. Officials have said, however, that they expect the first-year numbers to be low, as small-business owners using the federal exchange still cannot enroll online.

The administration says that feature should be ready by November.

In Maryland, which opted to build its own insurance marketplaces and also has not built an online employer exchange, the wait for employers could be even longer.

Maryland Health Benefit Exchange officials recently voted to abandon the state’s efforts to build a new online small-business exchange. Instead, Maryland will turn to insurance brokers to build their own version of a statewide employer marketplace.

The move saves money for the state, which estimated that it would cost between $1 million and $3 million to help brokers build out their existing enrollment technology, compared to $10 million to $20 million to build a new online small-business marketplace. It’s a win for brokers, too, who had worried they might lose business under the new system.

But is it a win for businesses? State officials think so, noting that most small employers currently buy plans through a broker; thus, the new system will more closely resemble the process with which they are already familiar.

The broker-built site isn’t expected to be fully functional until 2016. For now, small-business owners in the state can only apply for plans under the health care law through registered brokers and third-party administrators, using paper applications.

State health officials did not have data to share on how many small-business owners and employees have signed up through that system.

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he manages the Post's On Small Business blog.
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