Health law provision for small business is delayed
Obama administration fails to meet strict deadlines to deliver on major point of legislation
WASHINGTON — Unable to meet tight deadlines in the new health care law, the Obama administration is delaying parts of a program intended to provide affordable health insurance to small businesses and their employees — a major selling point for the health care legislation.
The law calls for a new insurance marketplace specifically for small businesses, starting next year. But in most states, employers will not be able to get what Congress intended: the option to provide workers with a choice of health plans. They will instead be limited to a single plan.
The choice option, already available to many big businesses, was supposed to become available to small employers in January 2014. But administration officials said they would delay it until 2015 in the 33 states where the federal government will be running insurance markets known as exchanges. And they will delay the requirement for other states as well.
The promise of affordable health insurance for small businesses was portrayed as a major advantage of the new health care law, mentioned often by White House officials and Democratic leaders in Congress as they fought opponents of the legislation.
Supporters of the health care law said they were disappointed by the turn of events.
The delay will “prolong and exacerbate health care costs that are crippling 29 million small businesses,” said Sen. Mary L. Landrieu, D-La. and chairwoman of the Senate Committee on Small Business and Entrepreneurship.
In the weeks leading up to passage of the health care legislation in 2010, Landrieu provided crucial support for the measure, after securing changes to help small businesses.
The administration cited “operational challenges” as a reason for the delay. As a result, it said, most small employers buying insurance through an exchange will offer just a single health plan to their workers next year.
Health insurance availability and cost are huge concerns for small businesses. They have less bargaining power than large companies and generally pay higher prices for insurance, if they can afford it at all.
The 2010 law stipulates that each state will have a Small Business Health Options Program, or SHOP exchange, to help employers compare health plans and enroll their employees.
One of the most important tasks of the exchange is to simplify the collection and payment of monthly premiums. An employer can pay a lump sum to the exchange, which will then distribute the money to each insurance company covering its employees.
The Obama administration told employers in 2011 that the small-business exchange would “enable you to offer your employees a choice of qualified health plans from several insurers, much as large employers can.” In addition, it said, the exchange would “consolidate billing so you can offer workers a choice without the hassle of contracting with multiple insurers.”
Exchanges are scheduled to start enrolling people on Oct. 1, for coverage that begins in January. However, the administration said the government and insurers needed “additional time to prepare for an employee choice model” of the type envisioned in the law signed three years ago by President Barack Obama.
D. Michael Roach, who owns a women’s clothing store in Portland, Ore., said the delay was “a real mistake.”
“It will limit the attractiveness of exchanges to small business,” Roach said. “We would like to see different insurance carriers available to each of our 12 employees, who range in age from 21 to 62. You would have more competition, more downward pressure on rates, and employees would be more likely to get exactly what they wanted.”