One year in, the new small-business insurance marketplaces born out of the new federal health-care law have fallen short of their promise in nearly every state, both in terms of functionality and enrollment. However, many are scheduled to see some important updates heading into year two — ones that health officials say should make them much more useful and appealing to small employers and their workers.
In the nation’s capital, for example, officials are preparing to roll out the third major update to the District of Columbia’s health-care marketplace, which already houses one of the country’s most robust small-business exchanges, often called SHOP (Small Business Health Options Program) exchanges. District small businesses have already been able to shop for and select plans online — an option that was delayed by at least a year in most states.
The District’s update, scheduled for later this month, is to include new features that allow employees to update their information and more easily make changes to their coverage if, for instance, they get married or need to add or drop a dependent from their plan. District officials have also tweaked the site to give employers more flexibility in the enrollment process and permit them to more easily hand the entire process over to a licensed broker.
In addition, officials this fall unveiled a mobile app for small-business owners, which allows them to browse health plans, determine their company’s eligibility and find a nearby broker using built-in GPS technology.
“We’ve been soliciting feedback from employers, employees and brokers to see how we can improve the process and what additional functionality would help,” Hannah Turner, manager of the city’s small-business exchange, said in an interview.
More improvements are coming early next year, she said. By this spring, her team hopes to have added stand-alone dental plans to the site’s small-business offerings and implement an online payment system. Currently, business owners who purchase plans through the exchange can send in one check (or pay by phone) to cover their premiums for the entire company, but they cannot pay over the Internet.
In Maryland, meanwhile, small-business owners are still waiting for an online marketplace — and the wait will continue into next year, if not longer.
State officials repeatedly delayed and eventually scrapped their plans to build an online small-business portal, instead focusing their attention on improving the state’s glitch-ridden individual exchange. Consequently, Maryland small employers interested in plans available through the new state-run marketplace this past year had to work with a broker and apply for coverage using paper applications.
Maryland will likely be the only state where that remains the case next year, as state officials have elected to turn over the state’s small-business health exchange to three third-party organizations that work with brokers. Joshua Sharfstein, chairman of the Maryland Health Benefit Exchange board, said those third-party administrators are expected to build electronic sign-up systems and eventually an online health care portal, but neither will be ready for companies enrolling in coverage later this year.
Asked about a timeline for the online functions that were supposed to be in place last year, he said “it’s in 2015, but I don’t know exactly when.” In addition, the new system, which is expected to save the state upwards of $10 million over building its own employer exchange, could ultimately result in multiple online small-business marketplaces operated by each of the third-party organizations.
“It’s a much less expensive plan and one that we expect to be more successful,” Sharfstein said of the state’s decision to put the SHOP in the hands of third-party groups.
Sharfstein added that the state is working with brokers to implement some important improvements to the state’s small-business marketplace early next year. In January, for example, Maryland small businesses can expect to see the start of what’s called the “employee-choice” option — a provision built into the health-care law that allows small-business owners to select multiple plans from various carriers and let their employees choose which coverage works best for them.
Despite facing similar challenges, other states are plowing ahead with their own small-business exchanges.
Colorado, for example, which had numerous technical problems, has made several improvements to its online SHOP portal, and officials expect a smoother shopping experience for small businesses this year. Washington state, which nixed its plans for online small-business site last year after few carriers showed interest, relaunched its online SHOP exchange earlier this month.
In the nearly three dozen states that have defaulted to the federal government’s small-business exchange (including Virginia), employers can also expect to see some improvements, but still not the whole caboodle. After a test run in five states later this month, Healthcare.gov’s small-business portal is scheduled to roll out on Nov. 15, more than a year after its originally scheduled start. At that point, employers will be able to sign up for coverage with the click of a mouse.
Health and Human Services officials in charge of Healthcare.gov say they have made other improvements to the site, too, which should allow it to withstand the type of heavy traffic that caused the site to crash last year.
One improvement that won’t be ready is the availability of an employee-choice option. Earlier this year, federal health officials granted 18 states permission to delay that option for a second year.
“Employee choice has been one of the principle justifications for having SHOP exchanges,” Timothy Stoltzfus Jost, a professor at the Washington and Lee University School of Law, wrote in a blog post about the waivers this summer. “Postponing it another year will in all likelihood impede enrollment growth for 2015.”
Just having those services might not be enough. In the District, only about 1,200 people have enrolled in plans through the employer exchange (companies can enroll at any point during the year), compared to more than 5,000 through the city’s individual exchange, which has a limited open-enrollment window. In part, that may bebecause of the type of companies officials have tried to attract.
“Our focus has been on reaching small businesses that don’t offer coverage, and that’s been a challenge, trying to make the business case for why they should start offering it,” said Mila Kofman, director of the city’s exchange, called DC Health Link. She noted that her team has partnered with business groups such as the D.C. Chamber of Commerce, the Washington Hispanic Chamber of Commerce and the Restaurant Association of Metropolitan Washington to reach out to small employers.
Kofman declined to say how many small businesses she expects to sign up this year, saying that “it’s more about what we’re able to offer to customers than about numbers.” She added that her team will “try to keep making modifications and improvements based on what we’re hearing from individuals and small businesses.”