Start Date for Small Business Healthcare Exchange Delayed Yet Again

The Obama administration announced this week that a key feature of the small business online marketplaces, intended to make purchasing healthcare easier for small businesses, will be delayed again until fall of 2015.

One of the major selling points of the Affordable Care Act for small business was the requirement that states offer exchanges where these businesses can choose a single healthcare plan for their employees or allow them to choose between several different plans. Small businesses would benefit from this arrangement by paying lower costs for some plans, while employees could choose the plan that best addresses their individual health needs.

However, states using the federal exchange will be able to opt out of offering a choice in plans until late 2015. The feature will be available to states by the originally rescheduled date.

This is the latest extension of ACA provisions affecting small businesses’ ability to take advantage of the online exchanges. Currently, small business owners must use paper applications instead of purchasing insurance online; in addition, three states still have not provided an online marketplace for small businesses to shop for insurance.

Another extension will benefit small business, but threatens to drive up insurance costs across the board. Small businesses that renewed their healthcare plans in 2013 to retain lower-cost, non-compliant policies will now have until 2016 to transition to ACA-compliant healthcare plans instead of the previous Fall 2014 deadline. The lack of new entries into the ACA “risk pool” may cause insurers to raise their premiums for 2015 in discussions that are already happening.

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