The Small Business Health Options Program (SHOP) was supposed to allow employees of companies with 100 or fewer workers to choose a health insurance plan that best fits their individual needs.
The only problem? It hasn’t worked so far.
The Obama administration announced on Tuesday that 18 states, including North Carolina, Alabama and Maine, are allowed to delay offering the “employee choice” feature to small employers until at least 2016. In March the Department of Health and Human Services said that states that rely on the federal health insurance exchange could request to delay their employee-choice programs if their insurance commissioner felt that implementing that option was not best for the small-business insurance market in that state—all 18 states that requested a delay were granted one.
The new delays are another sign that President Obama’s plan to roll out a broad federal health care reform policy isn’t going very smoothly, according to Politico columnist Brett Norman:
SHOP has always been in the shadow of the individual exchanges, but unlike HealthCare.gov, which recovered from its fiasco start and signed up 8 million people, the federal SHOP is still nearly moribund. Its website has yet to get off the ground. Without online enrollment—which the Obama administration maintains should be available this fall—the only sign-ups have come through via pen and paper … It’s yet another piece of the law, like the Medicaid expansion made optional by the Supreme Court, with uneven implementation throughout the country.
Even the states that have managed to get their SHOP exchanges up and running on time have suffered from very low enrollment, probably because many small businesses kept their former health plans after the Obama administration decided at the last minute that they didn’t need to cancel them after all. Moreover many insurers were competing fiercely for small group plans, meaning small employers felt little need to turn to the SHOP exchange.
“Small businesses weren’t screaming for this,” Gary Claxton of the Kaiser Family Foundation told Politico. “I don’t think the demand was there.”
It remains to be seen whether SHOP will take off in coming years as employers are required to offer insurance that’s fully compliant with Affordable Care Act rules.
In the meantime, House Small Business Chairman Sam Graves issued a statement criticizing the SHOP delays:
This pattern of continued delays and confusion is especially disappointing to me and the small business community as many firms grapple with increased health costs. Under Obamacare, costs are increasing for nearly two-thirds of small businesses that provide health insurance to their employees, according to a CMS report released in February. Just imagine trying to run a small company and keep up with all of the changes and delays regarding this law.
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