Small Business

Another delay for small-business health exchanges? Depends on whom you ask.

Robb Mandelbaum, The New York Times SHOP Marketplace for small businesses

If you thought that the small business health insurance exchange would be fully working Friday, prepare for some disappointment. On Tuesday, while testifying at a House hearing, Marilyn Tavenner, the head of the Center for Medicare & Medicaid Services, the government agency implementing the federally run health insurance exchanges, said that the Small Business Health Options exchanges would be functional "at the end of November."

It is not clear, however, that Ms. Tavenner's timetable represents a delay, although both BloombergBusinessWeek and the Washington Post characterized it that way. In late September, the administration announced that the small-business exchanges, known as SHOP exchanges, would debut Oct. 1 with limited functions. Businesses would only be able to register and "get an overview of available plans and premiums in their area," as a news release from the Department of Health and Human Services put it. Actually enrolling in a plan would only be possible over the phone.

The press release said that the federal SHOP exchanges would be fully functional "in November," not on Nov. 1. In a briefing that afternoon at the White House, administration press secretary Jay Carney twice also said online comparison shopping would begin "in November."

But he also twice pegged the starting date as Nov. 1—though once he qualified this with "as I understand it"—and that's where the confusion lies.

Nonetheless, at least one critic of the law has seized on Ms. Tavenner's testimony. "As if small businesses didn't have enough to deal with in an uncertain economy, they now must find time to comply with the maze of health law regulations and requirements, and figure out when the Small Business Health Options Program will actually be available for them," said Rep. Sam Graves, the Missouri Republican who chairs the House Small Business Committee, in a Wednesday press release. "This law's rocky enrollment rollout is creating more stress and uncertainty for many Americans and small businesses, and this latest confusion adds to a growing list of frustrations."

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Whatever political positioning this statement may represent, Mr. Graves raises a valid point: businesses seeking coverage for Jan. 1 must enroll by Dec. 15. And if "by the end of November" Ms. Tavenner means Nov. 30, then, as Mr. Graves pointed out, "small businesses could have as little as 16 days to enroll in SHOP plans."

Chris Jennings, deputy assistant to the president for health policy, said that the administration had not articulated a date for the full SHOP introduction apart from Mr. Carney's remarks at the news conference. But he seemed to acknowledge that the date had been recalibrated. Ms. Tavenner's time frame, he said, reflected the administration's pledge, made last week, that the website will be "fully functioning for the vast majority of people" by the end of November.

Mr. Jennings insisted that while "SHOP is a very high priority" for the administration, the Jan. 1 coverage date is not as crucial here as in the individual market, because the SHOP exchanges are open for enrollment all year. Many small businesses have policies that begin on other dates, and in any event, companies "can opt into SHOP and opt out of their current coverage at any of the time of the year — they can just stop paying the premiums on their existing policy." But, he added, "I don't want to minimize this; we want it up as quickly as possible."

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Meanwhile, small businesses in some states that are logging on to the federal SHOP site for the available overview are finding few options, according to insurance brokers in those states. In Texas, for example, only two insurers are participating in the exchange, and only one, BlueCross BlueShield of Texas, is offering SHOP plans statewide. Kelly Fristoe, an insurance broker in Wichita Falls, said that in his area, small employers had at least seven carriers to choose from outside of the exchange for plans that comply with the Affordable Care Act's requirements.

Small employers do not have to purchase health insurance on the SHOP exchange—in fact, those with fewer than 50 employees do not have to buy health insurance at all under the law. Regardless of where they buy insurance, however, it must meet the law's minimum standards, or employees will still have to pay the tax penalty, or find their own compliant insurance elsewhere.

"I have many small groups that would benefit from the tax credits available through the SHOP exchange but none of my small group employers (and their C.P.A.'s) want to go through the hassle of the paperwork to claim the tax credits," Mr. Fristoe said in an email. "Both the employer and CPA's have told me that the paperwork is a nightmare and spending the time to do it just isn't worth it."

Brokers in Georgia, North Carolina, and New Jersey echoed this view, and reported fewer plans and smaller networks within the exchanges than outside of them. David C. Smith, a broker in Fayetteville, N.C., said that only one in a hundred small-business clients are interested in the North Carolina exchange. "The two reasons to be in SHOP are for the tax credits or if the rules are favorable to you," he said. But, he added, "you've got to hit the eye of a needle from a mile away to use one of those. That's why such a small percentage is going on to SHOP."