States and insurers have the option to scale back on health insurance plans for small business until 2015, the government said.
The Affordable Care Act envisions a separate health insurance marketplace for small business, with employees having a choice of plans from different insurers. Instead, the states now can offer one plan in 2014, with the multiple coverage plans not going on the block until 2015.
California, however, indicated it would continue with the multiple insurance choices for employees.
The Obama administration cited “operational difficulties” in launching the Small Business Health Options Program (SHOP). Instead, the states and insurers will get “additional time to prepare for an employee choice model,” the administration said.
Insurance companies had pressed the administration to delay the employee choice option, the New York Times reported.
“For transitional purposes we have proposed that in 2014, a SHOP may elect to have businesses choose one plan to offer employees,” Health and Human Services said in a statement. “In 2015 employees will be able to choose from the full range of plans in the Marketplace.”
Businesses with up to 100 employees will be able to buy insurance in the exchanges. Larger businesses often offer workers a variety of health insurance plans.
Many small businesses looked forward to competition between insurers to hold down their costs, as well as state exchanges’ “premium aggregation” function that would simplify the payment process.
The group Small Business Majority pointed out that the Affordable Care Act benefits “have historically been reserved for large businesses and public employees, while small businesses often have to offer a ‘one-size fits all’ plan with added administrative hurdles.”
Group founder John Arensmeyer said in reaction to the delay: “Our opinion polling reveals the vast majority of small employers believe allowing employees to choose among multiple carriers is an important element of the healthcare marketplaces.”
In California, the advocacy group’s polling showed, 67% of California small business owners want employees to be able to choose between multiple insurance carriers.
Arensmeyer said the federal ruling would not become official for 30 days. By not delaying, he said, the government “can reverse a longstanding market trend that has left small employers on unequal footing for too long.”
Insurers said that the administration was partly to blame for the delay because it did not provide detailed guidance for the small-business exchange until March, the New York Times said.
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