Obamacare's Very Small Business Exchange Enrollment

Remember those "other" new Obamacare exchanges—the ones that small businesses were supposed to use to sign up workers for health insurance?

Yeah, well, apparently a whole bunch of small businesses forgot about them, too.

A new Government Accountability Office report finds that a stunningly low number of workers have enrolled in insurance plans sold on small-business health exchanges run by federal and state governments.

The report suggests that the Small Business Health Options Program exchanges will fall well short of the 2 million people that had been projected to sign up by January.

As of last summer, only about 76,000 people working for about 12,000 employers had enrolled in insurance plans sold by 18 state-run SHOP exchanges, according to the GAO report released Thursday.

While the other 33 SHOP exchanges run by the federal government didn't have enrollment data available for the GAO, officials in charge of them "do not expect major differences in enrollment trends between" the state-run SHOP exchanges and their federally run counterparts, the report noted. The federal Centers for Medicare and Medicaid Service was still compiling enrollment data from insurers and did not expect complete numbers until early 2015, the GAO said.

Mississippi's solo enrollee

The SHOP exchanges are supposed to help small employees provide group health coverage to their workers. But most such employers clearly haven't bothered to take the exchanges up on that offer, or aren't aware that it's available, raising questions about whether these exchanges can get close to the 4 million enrollees that had been projected by 2017. 
One state-run SHOP—Mississippi's—had just one person enrolled, the GAO report said. The agency notes that Mississippi's SHOP had only been open for one month at the time the data were collected for the report. The state's insurance department pointed out Thursday that there are now 23 people enrolled through Mississippi's SHOP.

Washington state had the second-lowest enrollment with 42 people.

Two population-heavy states, California and New York, had just 9,563 and 10,023 people enrolled, respectively, in their SHOP exchanges during their first year of operation.

Vermont, the second-least populous state, had by far, the highest enrollments in a state-run SHOP: 33,696 people. That represents 44 percent of all enrollees on the state-run SHOPs. 
But that eye-popping number likely is due in no small part to the fact that Vermont had required that all small group health insurance plans in the state be offered only through the SHOP.

The GAO report said stakeholders in SHOPs blamed the dismal enrollment tallies on "multiple, evolving factors." Those included the possibility that a small business tax credit designed to spur companies to use the exchanges "may be be too small" and "administratively complex to motivate many employers to enroll." The tax credit, available to companies with fewer than 25 full-time employees who make an average of $50,000 or less per year, can be worth up to 50 percent of what employers contribute to their employees' health premiums.

"Other factors identified that may have hindered current enrollment include the ability of employers to renew plans that existed before the SHOPs ... and employer misconceptions about SHOP availability," the report said.

SHOP wishlist

The GAO also noted that federal SHOP exchanges were not able to enroll people online, and that those exchanges gave enrollees only a single health plan as an option, as opposed to multiple plans. While 15 states launched in October 2013, three significantly delayed their starts until spring 2014.

The stakeholders interviewed by the GAO, including CMS officials and state exchange executives, identified several factors that could spark enrollment, GAO said. These ideas included the phase-out of health plans that were in existence before the SHOP exchanges launched last year, more choice among health plans for workers on the exchanges and increased marketing to small businesses.

"CMS is currently preparing to implement online enrollment for all [federally run] SHOPs and employee choice for many of [those] SHOPs in 2015," the report noted. But the two-year limit on the small-business tax credit and the likelihood that SHOP premiums will not be lower than those of non-SHOP plans "may hinder future enrollment growth," the report noted in its summary. When asked for comment, CMS officials referred to that summary.

Rep. Sam Graves, R-Mo., chairman of the House Small Business Committee that requested the GAO report, said "Obamacare's SHOPs have been fraught with errors and high costs from the very beginning."

Graves also said, "The lack of specific federal SHOP enrollment data confirms that [the Centers for Medicare and Medicaid Services] initially created no mechanism to monitor or measure its performance after enrollment began."

"It is apparent that the Obama administration didn't prioritize the SHOP exchange in the law. Small businesses and taxpayers deserve better," he said.

The SHOP exchanges' poor performance contrasts sharply with the enrollment seen in individual health plans sold on the federal HealthCare.gov exchange and the 15 other exchanges run by individual states and the District of Columbia. About 7.1 million people are currently enrolled in insurance sold through those markets.

Open enrollment in SHOP and individual Obamacare plans starts Saturday.

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