Online enrollment under the Small Business Health Options Program (SHOP) is postponed until November 2014. (Jon Elswick/Associated Press)
Online enrollment under the Small Business Health Options Program (SHOP) is postponed until November 2014. (Jon Elswick/Associated Press)

Some federal officials knew the online small business insurance marketplace would not be ready for its Oct. 1 launch nearly six weeks before the administration announced its initial delay, according to e-mails released Friday by the House Energy and Commerce Committee.

In a series of e-mails from July 25 and Aug. 13, officials from the Centers for Medicare & Medicaid Services and's main contractor, CGI Federal, sparred over whether the Small Business Health Options Program, known as the SHOP exchange, would be ready to go on Oct. 1.

Health and Human Services announced on Sept. 26 the exchange would be delayed for a month; the day before Thanksgiving the agency said they would not offer online enrollment for small businesses until November 2014.

On Friday, CMS said in a statement that the e-mails "reflect one piece of many conversations about managing deliverables and communicating expectations. These emails do not reflect final decisions made by more senior CMS officials."

CMS also said that the final decision to delay SHOP enrollment was not made until mid-September, and that the agency "announced the delay once we had complete information about what functionality would be available for small business owners on Oct. 1st."

According to the e-mails, CMS officials began sounding the alarm about the program's readiness in late July, and in an exchange on Aug. 13, CGI's vice president of consulting Mark Calem wrote to them about a “planned rollout schedule for SHOP" in which the "employee portal goes live” on Nov. 15.

In response CMS deputy chief information officer Henry Chao -- who frequently questioned the contractor's performance in the months leading up to the launch -- wrote, "Can we sign this with blood?"

Given the program's delay, small businesses have the option to purchase SHOP plans through a broker or agent, who will help the employer file a paper application.

However House Energy and Commerce Chairman Fred Upton (R-Mich.) said in a statement that the e-mails "tell a much, much different story than what officials testified to Congress."

“As the paper trail broadens, we see more and more evidence that the administration was fully aware its signature health care law was not ready for prime time,” he said. "While it’s not clear if any ‘blood oath’ was taken, the president’s top lieutenants repeatedly looked us in the eye, insisting that they were ‘on track’ when they knew looming deadlines would be impossible to meet. These are not the characteristics of the ‘most transparent administration in history.’"

HHS Secretary Kathleen Sebelius is slated to testify before the committee next week: Upton said Sebelius "must come prepared next week to provide answers about what January 1 and beyond will really look like."