Kristi Whitfield, owner of Curbside Cupcakes in Washington, D.C., is exactly who the Washington, D.C. Small Business Health Options Program, or SHOP, had in mind.
The entrepreneur has eight employees, and enrolled some staff and her family in insurance plans through the exchange, designed for small businesses with fewer than 50 employees. The move is saving her $300 a month, and will also qualify for a small-business tax credit under the Affordable Care Act.
Congress on the other hand, doesn't fall under SHOP's small-business qualifications. Yet 13,000 members and staffers have enrolled in subsidized insurance plans under the same small-business exchange Whitfield used.
How did this happen?
Obamacare legislation calls on states to create two types of online insurance portals—one for individuals and families, and one for small businesses with fewer than 50 employees. But as an employer, Congress fits into neither bucket.
So the workaround was a rule issued in 2013 by the U.S. Office of Personnel Management—a federal agency—that directs congressional members to enroll in the health-care exchange that was set up for small businesses with 50 or fewer employees.
The move allowed members of Congress and their staff to keep the subsidized health care they've long received for being federal employees under the Federal Employee Health Benefits program. The House and Senate employ thousands, and the personnel management office essentially had issued a ruling that contradicted the Obamacare legislation.
It wasn't long before legal challenges related to the rule began to emerge, with some contending Congress is pocketing a subsidized health-care care perk not intended for them.