White House Delays Small-Business Healthcare Exchanges

One of the key selling points for the Affordable Care Act---a provision that helps small businesses provide multiple health plan options for their employees---will be delayed until 2015, according to the Obama administration.

With deadlines coming up quickly, the Obama administration has put the brakes on a key benefit of its healthcare plan for small businesses.

Next year, the administration was expected to launch an insurance marketplace that would give small businesses a way to offer employees a choice of health plans. However, citing “operational challenges,” the White House announced recently that implementation of that part of the ACA would be delayed in the 33 states where the federal government plans to run healthcare exchanges.

More details:

The situation: In 2010, the Affordable Care Act (ACA) passed in part due to some late changes to the bill designed to give more options to small businesses to help them keep the cost of providing health insurance to employees under control. Under the bill, each state must offer a Small Business Health Options Program, or SHOP exchange, to give employers a way to compare plan options for their employees. The delay will push back implementation of that plan until 2015; in the meantime, small businesses will be limited to a single health plan option. Although the Department of Health and Human Services announced the change in March [PDF], it drew wide notice only after The New York Times reported the news on Monday.

Congress reacts: Sen. Mary Landrieu (D-LA), who worked to give small businesses more benefits and options in the final bill, told The Times that the delay will “prolong and exacerbate healthcare costs that are crippling 29 million small businesses.” Landrieu heads the Senate Committee on Small Business and Entrepreneurship. And in the House, Rep. Sam Graves (R-MO) raised questions about why the rule wouldn’t be implemented in a letter to the Centers for Medicare and Medicaid Services.

One association’s take: A spokesman for the National Roofing Contractors Association, whose members includes many small businesses, expressed frustration with the situation. “NRCA opposed the so-called Affordable Care Act due to concerns that it would harm employers and workers, particularly small businesses, by mandating more expensive, one-size-fits-all coverage and imposing billions of dollars in new taxes without providing effective reforms to control healthcare costs,” Duane L. Musser, NRCA vice president of government relations, told  Associations Now. “One of our specific fears is that health plan choices for small businesses will be reduced rather than expanded under the ACA, and therefore the decision by the government to limit small businesses to only a single option comes as no surprise.”

The advocacy group Small Business Majority also criticized the decision in a statement, calling it “a major letdown for small business owners and their employees.”


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

Got an article tip for us? Contact us and let us know!