If you were looking forward to an easier way to shop for employee health-insurance plans, you may have to wait a bit longer.
Last month, the Obama Administration requested that states be given more time to set up multiple options for health-insurance coverage, pushing deadlines back by one year, according to the Federal Register, the official newspaper of the federal government. In 2014, states would only have to offer small-business owners a single option on the exchange, giving them until 2015 to set up a model for providing employers multiple choices, the Federal Register says.
As part of the Affordable Care Act passed by President Obama three years ago, each state which chooses to operate a health exchange is also mandated to offer a Small-Business Health Options Program, called a SHOP. In general, exchanges are marketplaces where individuals and business owners can compare, pick and buy health insurance. The SHOPs are where small-businesses owners can find insurance options for their employees. If a state does not want to run its own health insurance exchange, the federal government will step in and run the exchange in that state.
As the New York Times first reported, the proposed rule change would allow states an extra year to get to the point of offering small-business owners multiple insurance options. “For transitional purposes we have proposed that in 2014, a SHOP 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,” says Brian Cook, spokesperson for the Centers for Medicare and Medicaid Services in an email to Entrepreneur.com.
States looking to set up their own exchanges say they are worried that they won’t be able to meet the existing deadlines, according to the Federal Register. Employers, employees and brokers all need to be educated, and enrollment and accounting systems all need to be updated to participate in the exchanges.
Last week, Rep. Sam Graves (R, Mo.), the Chairman of the House Committee on Small Business, sent a letter to the Administrator for the Center for Medicare and Medicaid Services calling for additional information about the SHOP delays. Graves has voted more than once to repeal the law entirely. He requested a response to his inquiry by April 22.
“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. In the meantime, it is likely that entrepreneurs will continue to experience the premium increases they have come to expect,” Graves wrote in the letter.
Small-business owners are anxious about the implications of the health-care law and they are also still largely in the dark about what the primary components mean. In particular, there remains confusion about the health-care exchanges. Another largely misunderstood component of Obamacare is the employee mandate, which requires businesses with 50 or more full-time workers to health-insurance coverage for their employees.
According to the employee mandate, if your business has more than 50 employees and you do not provide health insurance to them, then you have to pay an annual penalty starting at $2,000 per employee after 30 employees. If you have fewer than 50 employees, the health-insurance mandate does not apply to your business.
As a small-business owner, are you planning to provide your employees with health insurance or are you planning pay the penalty? Leave a note below and tell us why.