Small businesses will still have the ability to purchase a health plan for their employees through a health insurance exchange set up under the law. But the employees won’t have a choice of plan. Originally, the law called for the small business exchanges to let small employers pick a benefit tier to offer their employees; workers would then be able to select from a variety of plans within that tier. Because of the delay, the 33 exchanges run by the federal government will only allow employers to pick a single plan to offer all employees. States running their own exchanges will have the option to offer choice, but won’t be required to do so.
What that means is that exchanges in the majority of states won’t be offering health plan choice to small business owners. For all practical purposes, then, the law’s exchanges will offer nothing to small business owners and employees. As health policy professor (and ObamaCare supporter) Timothy Jost noted in Health Affairs when the delay was first proposed, the choice option was the “primary benefit” offered by the law’s small business exchange system. Without that option, he wrote, it’s “unclear what advantage” those exchanges would actually offer to small employers over currently available insurance options. The Chamber of Commerce seems to agree. As USA Today notes, it issued a statement saying that because of the delay, small business insurance purchased in the health exchange, "will be of little or no value to employers, or by extension, their employees."
Why the delay? According to The New York Times, the administration is citing unnamed “operational challenges.” Some reports suggest that insurers were not able to come up with plans that worked within the law’s guidelines in the time they had. Insurers, according to the Times, blame the administration “because it did not provide detailed guidance or final rules for the small-business exchange until last month.”
In other words, despite repeated assertions from senior administration health officials that the exchanges would be open on time, at least one key component clearly won’t be. The administration and the insurers it’s working with couldn’t manage the technical and logistical hurdles of the implementation fast enough. The nuts-and-bolts work of constructing ObamaCare’s complex infrastructure is turning out to be more difficult than the law’s backers anticipated.
The administration continues to maintain that the bulk of implementation will be ready on schedule. But you can already see their confidence slipping. The Medicare official heading up the exchange creation process recently told insurers that “it’s only prudent to not assume everything is going to work perfectly on day one,” and indicated that the administration was preparing contingency plans in case some exchanges aren’t ready for prime time. The official in charge of managing the law’s exchange technology, meanwhile, said he was “pretty nervous” about the opening of the exchanges. At this point, I would be too.