Photo credit: Barack Obama / Foter.com / CC BY-NC-SAPhoto credit: Barack Obama / Foter.com / CC BY-NC-SAIn response to skepticism that ObamaCare’s health insurance exchanges will be ready on schedule later this year, Obama administration officials have been swearing up and down, cross their hearts and hope to voucherize Medicare, that ObamaCare’s exchanges — the health insurance portals that are the centerpiece of the law — will indeed be ready on time.

In December 2012, Gary Cohen, the Health and Human Services (HHS) official heading up implementation of the health law, said he was “confident that states and the federal government will be ready in 10 months.” At the end of January, he reiterated his claim: The exchanges “will be ready,” he promised members of Congress.

Does partially ready count? On Friday, HHS all but admitted that at least one element of the exchanges won’t be entirely ready on time: the Small business Health Options Program (SHOP) — the health insurance exchanges ObamaCare set up to serve small employers. The SHOP exchanges were supposed to be fully in place by January 1, 2014. But newly released regulations propose delaying a key part of the small business exchanges for a year: the employee choice provisions that were arguably the most significant feature of the program.

The SHOP exchanges were supposed to help businesses with as many as 100 employees purchase employee health insurance. Employers would enroll in the exchanges, and then they would be allowed to select a broad benefit level. Employees would then be able to select from a variety of private plans classified in that benefit tier.

The HHS regulations, which are set to go into effect in May after a comment period, would delay the implementation of the employee choice option for a year in the federal exchanges, and make it merely optional in state exchanges. Under these rules, small businesses won’t be able to select a benefit level; instead they will only be able to select a single plan for their employees.

This isn’t quite the same as delaying the SHOP exchanges entirely. But it’s close.

As influential health policy scholar (and ObamaCare backer) Timothy Jost notes in Health Affairs, most observers considered the choice option the “primary benefit” of the small business exchange. Without that option, he says, it’s “unclear what advantage” the SHOP exchange would actually offer to small employers over insurance options that already existed.

Why the delay? The proposed regulations note that HHS has received comments identifying “challenges to the effective implementation of employee choice.” LifeHealthPro reports that HHS officials further noted that the agency “found that many commenters were not sure whether insurers could really handle the administrative tasks associated with an employee choice program.”

In other words, it’s a giant technical and administrative task, and there just isn’t enough time to get it all done on deadline. Which shouldn’t come as a surprise: For the last year or so, we’ve seen reports of technical frustrations, missed and delayed deadlines, and exchange administrators who admit that the law’s implementation timline just isn't feasible. Even the Congressional Budget Office has expressed some skepticism about the likely readiness of the exchanges. At this point, the big question is whether this will be the only significant delay, or whether it will be the first of many.