Small-business employees will have to wait a year before they can choose their own medical coverage after the Obama administration delayed implementation of a provision in the 2010 U.S. health-care law.
Starting in 2014, workers at companies with fewer than 100 employees were supposed to have been able to choose from a variety of health plans through new small-business insurance marketplaces. They’ll instead wait until at least 2015, according to regulations released by the U.S. Department of Health and Human Services.
In the meantime, small-business employees will face a situation similar to what most companies offer, with their employers choosing the coverage. Health insurers will still offer the plans, though they’ll be competing for business from companies, not individuals.
The delay is “a major letdown for small-business owners and their employees looking forward to robust, competitive exchanges in 2014,” said John Arensmeyer, chief executive officer of the Small Business Majority, an advocacy group that backed the health-care law, in a statement.
Implementation of employee choice in the program won’t be possible next year because of “operational challenges,” the U.S. said in the regulation posted March 11. The government, in its regulatory statement, said it had heard from insurers and others who were worried that health plans, brokers and companies wouldn’t be able to adjust to the new marketplace, called the Small Business Health Options Program, or SHOP, in time.
“This transitional policy is intended to provide additional time to prepare for an employee choice model and to increase the stability of the small group market while providing small groups with the benefits of SHOP in 2014,” the Obama administration said in an explanation of the ruling.
The delay applies only to 33 health exchanges run by the federal government. Sixteen states and the District of Columbia are building their own.
The postponement offered another opportunity for critics of the law.
“If one of the key goals of supporters of the health care law was to provide small business owners with a competitive process by which they could select from a number of affordable health insurance plans for their employees, then that goal is not in sight,” Representative Sam Graves, a Missouri Republican, wrote in a March 27 letter to Marilyn Tavenner, who heads the Centers for Medicare and Medicaid Services.
Graves heads the House of Representatives’ Small Business Committee. Tavenner’s agency is responsible for implementing parts of the law.