On Monday, the Obama administration announced that it would delay by one year implementation an Affordable Care Act provision intended to give small businesses multiple health plan options starting in 2014, citing the need for additional time to prepare, the AP/Miami Herald reports (AP/Miami Herald, 4/1).
HHS proposed that in the first year of the Small Business Health Options Program, or SHOP, businesses that operate in the 33 states with health insurance exchanges run fully by or in partnership with the federal government will be able to offer only one plan to their employees, rather than choose from a range of options. Meanwhile, federal officials said that the 17 states running their own insurance marketplace could enact a similar delay.
HHS press secretary Fabien Levy said, "For transitional purposes we have proposed that in 2014, a state may elect to have businesses choose one plan to offer employees, and in 2015 employees will be able to choose from the full range of plans in the marketplace."
Bob Graboyes, a senior fellow at the National Federation of Independent Business, said the reason for the delay is likely that the government did not properly gauge the information technology infrastructure required to get the exchanges "up and running." He said, "They didn't leave enough time and they underestimated the extent of the task."
There were earlier indications that the SHOP program would be delayed, according to the Wall Street Journal. In early March, the administration released a proposed rule stating that the government needed "additional time to prepare for an employee choice model and to increase the stability of the small group market."
The GOP-controlled House Small Business Committee last week formally requested more information on the delay, setting an April 22 deadline for a response. Committee spokesperson Darrell Jordan warned that the delay would "lead to less competition, which could lead to higher premiums" for small companies (Needleman/Radnofsky, Wall Street Journal, 4/1).