Workers Get Few Choices Under Small-Business Obamacare

Small-business workers getting health insurance through Obamacare were supposed to be able to choose their own plans. Instead, in more than half of states using the U.S.-run version of the program, employers will pick.

It’s a promise of the law that will go unfulfilled next year for people in 18 of 32 states using federal-run small business markets. For example, workers in Texas will have a choice of health plans, while those in neighboring Oklahoma and Louisiana won’t, the U.S. Centers for Medicare and Medicaid Services said today in a website posting.

The Patient Protection and Affordable Care Act’s insurance exchanges for small businesses have experienced more delays and setbacks than the markets for individuals, which signed up about 8 million Americans by the end of April. Nationwide enrollment in the Small Business Health Options Program, or SHOP, is unknown. States that run their own exchanges for employers report the program hasn’t attracted much interest so far.

“It’s been a poor stepchild to the rest of the ACA and has yet to prove it can walk and chew gum at the same time, particularly online,” Neil Trautwein, a vice president at the National Retail Federation, a Washington lobby group for retailers, said in a phone interview.

The health law created small-business insurance markets for companies with 100 or fewer workers to buy coverage, parallel to a similar system for individuals. The U.S. let states choose whether to run their own exchanges or use the federal system.

No Website

It has not gone smoothly. The Obama administration said last year that it would delay what it calls the “employee choice” feature of the small-business exchanges until 2015. Before the exchanges opened in October, the government said small businesses wouldn’t be able to use a website to enroll and would have to use insurance sales brokers instead.

Last month, the administration said it would let insurance commissioners in states using the federal system decide whether to offer small-business workers a choice of plans. Trautwein said business owners aren’t clamoring for the feature and that it may add complexity to the exchanges.

“It would be much wiser in our view to get basic functions up and running before trying to complicate it further,” he said.

Fourteen states that run their own small-business exchanges allow employees to choose their plans, in addition to the 14 in the federal system that will provide the feature, the Medicare agency said.

Kevin Kuhlman, manager of federal public policy for the National Federation of Independent Business, a Nashville, Tennessee-based group that has opposed the health law, said leaving the decision on employee choice to states will further complicate the regulatory landscape for businesses.

Insignificant Markets

“The end result will be that SHOPs remain insignificant and small businesses will just try to keep what they have, what they currently have, for as long as possible,” he said in a phone interview.

State officials have said that many small businesses chose to renew their existing health plans late last year instead of buying new coverage in exchanges, contributing to low enrollment. Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services, said in an e-mail that the agency won’t know how many businesses used the exchanges until it collects the data from insurers “later this year.”

Separately today, the agency announced it would provide $60 million in grants for organizations, called navigators, that help people sign up for 2015 coverage. The total is $7 million less than the agency offered this year.

Enrollment for 2015 health plans offered on the exchanges begins Nov. 15 and closes three months later, half as long as enrollment this year.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net Drew Armstrong, Andrew Pollack

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