Health care reform
On November 27, the Obama administration announced another delay in the implementation of the health care reform law. Small businesses will not be able to enroll in coverage through the federally run SHOP (Small Business Health Options Program) marketplace until November 2014. They can currently enroll on state-run marketplaces, in those states where such marketplaces are operating.1
This announcement supersedes the guidance released in October about accessing SHOP coverage. The October announcement said that while small businesses could view plans and begin the enrollment process on the marketplace, they could not enroll on the marketplace until November 2013. With this latest announcement, small businesses learned that, until next year, they must enroll through a broker, agent or insurance company that offers a certified SHOP plan and has agreed to conduct enrollment according to Health and Human Services (HHS) standards.
Whether a small employer buys insurance through a state-run SHOP or directly through a broker, agent or insurance company, the employer will be eligible for the 2014 tax credit.
SHOP is designed for businesses with fewer than 100 employees, although most states will likely limit initial employer size to 50 until 2016. Through SHOP, smaller employers will be able to offer employees a variety of Qualified Health Plans, and employees can choose the plans that fit their needs and their budget. Businesses may also be eligible for small business tax credits when they offer health coverage through a SHOP exchange. Eventually these exchanges may be open to businesses of any size.
When the federal marketplace opens next year, it will feature a choice of coverage for the 2015 plan year (rather than the single plan offered for 2014). The state marketplaces are able to offer multiple plans for 2014.
The federal SHOP marketplace delay joins several other recent changes to the Patient Protection and Affordable Care Act (PPACA):
Between the employer mandate delay and SHOP marketplace delay, some employers who do not currently offer health insurance may decide to delay adding coverage until 2015 when the SHOP marketplace opens for business. This means some employees may not gain access on January 1, 2014 to employer-provided health coverage as previously expected.
The implementation of the health care reform law has been confusing and difficult for employers. The delays and issues with the marketplaces have added to that difficulty. However, with this delay, small employers are positioned to work with the experts in the industry — brokers and agents. Small employers who want to purchase medical coverage (and who operate in states with federally managed marketplaces) will need to go through a broker, agent or insurance company to obtain insurance.