Administration officials characterized the decision as one made necessary as they prioritized fixes to the individual health exchange, which the White House has promised will "work smoothly for the vast majority of users" by Dec. 1.
"What's important in our work is to continue to prioritize the best consumer experience for those who are coming to us online," Medicare spokeswoman Julie Bataille said. "These decisions all reflect [that] reality."
The Obama administration is aiming to double HealthCare.gov's capacity by Sunday, increasing it from 25,000 concurrent users up to 50,000 shoppers using the Web portal at once. Bataille said it was "on track" to hit that metric by Dec. 1.
Small businesses will still have the option to purchase SHOP health insurance plans through a broker or agent, who will assist the employer with filing a paper application. The federal government expects to process those filings for eligibility within three to five days, according to a document circulated to health law stakeholders.
"We’ve concluded that we can best serve small employers by continuing this offline process while we concentrate on both creating a smoothly functioning online experience in the SHOP Marketplace, and adding key new features, including an employee choice option and premium aggregation services, by November 2014," that Centers for Medicare & Medicaid Services document said.
Health law supporters expressed frustration at the decision, but said they still support the overall goal of making it easier for small businesses to shop for coverage.
"It’s disappointing that the online portion of the federal small business marketplace through Healthcare.gov will be delayed and it’s important it get up and running as soon as possible," said John Arensmeyer, president of the Small Business Majority, a nonprofit that supports the Affordable Care Act. "However, it doesn’t change the fact that the marketplace can offer the most competitive combination of price and quality for small businesses purchasing health insurance."
Republicans immediately seized on the delay as evidence that the Obama administration is not ready to launch the Affordable Care Act.
“While Americans prepare for the holidays and one day after President Obama gave another speech trying to blame the ObamaCare trainwreck on Republicans, his administration is delaying yet another portion of his signature healthcare law," Republican National Committee chair Reince Preibus said in a statement. "With each passing day, it’s clear how much worse ObamaCare is than a website full of glitches."
The SHOP Exchange has already had a troubled launch with multiple delays as the Obama administration has focused much of its efforts on launching the individual insurance marketplace where Americans can shop for subsidized health insurance coverage.
The new insurance marketplace was meant to give small businesses a simpler and more efficient way to buy insurance coverage for their workers. The online marketplace could stand in for a broker, allowing the business owner to easily compare the plans they could offer employees on their own.
With this new delay, small businesses will likely see little change in the way they purchase health insurance until 2015. They will, however, need to purchase one of the plans sold on the SHOP marketplace, through a broker, if they want to access a health law tax credit available to employers with fewer than 25 employees.
That tax credit first became available in 2010 regardless of where a company purchased coverage. Beginning in 2014, companies will need to buy through the marketplace to continue receiving that financial assistance, worth as much as 50 percent of their workers' premiums. In years past, the tax credit was capped at 35 percent of workers' premiums.
The federal delay effects the 36 states where the federal government is running the health insurance exchange. It does not change the small business options in the 14 states and the District of Columbia that are running their own exchanges.
The White House announced last April a one-year delay to the "consumer choice" function in the SHOP exchange, which would allow each employee to pick their own insurance plan, pushing that functionality back until the 2015 open enrollment season.
That delay was followed with another setback in September when the White House announced that online shopping in the small business exchange would not be available when open enrollment started in October.
Under the new Obama administration proposal, small businesses will now have to "go directly to an agent, broker or to an insurance company with plans certified by the Marketplace," the Q&A document states. "The insurer must agree to offer direct enrollment in SHOP coverage and to conduct enrollment according to HHS requirements."
The agent or broker will "help the employer fill out a paper application for SHOP eligibility and send it in to the SHOP Marketplace."