Obama administration permits further delay to health exchanges for small businesses


The Obama administration announced on Wednesday it was permitting delays in timeline for small business health exchanges. (Photo by Jahi Chikwendiu/The Washington Post)

The Obama administration on Wednesday gave states more time to implement a key feature of the new employer health care marketplaces and gave small businesses more time to comply with some of the new coverage requirements in the law.

Under the Affordable Care Act, states are required to offer a health care exchange where small businesses can enroll in and pay for insurance plans, all online. Companies in states that declined to build their own portals would be able to access a similar network run by the federal government.

In both cases, business owners were also supposed to be able to choose either a single plan or give their workers a choice between several plans — an option that is often too cumbersome to manage for small businesses. Making that “employee-choice” feature available on the exchanges was meant to give employers more flexibility and better control over their health costs.

Already pushed back once, it may be another year before business owners in some states can take advantage of that option.

That’s because, on the federal small-business exchange, which is being used by most states, both that feature and the online enrollment functions were delayed before the marketplaces opened last year. Both components of the marketplaces were supposed to be ready for small businesses by the end of this year.

On Wednesday, though, the administration again delayed the requirement that states using the federal exchange offer the“employee choice” option, pushing the deadline back another year to fall of 2015. The feature will still be ready, officials say, but states will now have the option to opt out of offering that option to small businesses through the exchange.

The change is a “major letdown for small business owners and their employees,” John Arensmeyer, chief executive of advocacy group Small Business Majority and an ardent supporter of the health care law, said in a statement.

“These kinds of benefits have historically been reserved for large businesses and public employees, while small businesses often have to offer a ‘one-size fits all’ plan with added administrative hurdles,” Arensmeyer added, later saying that “the employee choice option is crucial to the success of the small business marketplaces.”

This is one of a larger set of changes the administration announced Wednesday — for instance, the White House also announced that it will allow individuals and small businesses with non-ACA compliant plans to keep their insurance for another two years.

Moreover, it is the latest in a long series of changes to the timeline of the small-business health care exchange, which President Obama last year said would give business owners a Web site where they could shop for coverage with the same ease as buying flights on sites such as Priceline and Expedia.

Instead, for the first year, small business owners who want to enroll in plans through the federal marketplace can browse through plans online but must send in a paper application to sign up for coverage. As of now, the online enrollment functions are still supposed to be ready by this fall.

States running their own exchanges haven’t been immune to the problems, either. Small businesses in Oregon, Maryland and California, for example, currently do not have access to an online exchange. And even in states where the marketplaces are up and running, few small businesses have signed up for new insurance plans.

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