Just before Thanksgiving, the Obama Administration admitted that the Website that would allow small businesses to enroll for insurance online would not be working for at least another year. As the Administration raced to fix the balky healthcare.gov Website for individuals in time for yesterday’s deadline, the small business end of things has been back-burnered. Politically, the failure to bring the Small Business Health Option Program (or SHOP) online was another embarrassment for the President’s Keystone Kop IT team and an early Black Friday gift for Republicans seeking to portray the rollout of the Affordable Care Act as a train wreck.
Politics is one thing, though, and business is another. While the technology setback is frustrating, and in a few cases it may raise the urgency of applying for coverage for the first time, it probably isn’t a very big deal for you or your business. What is truly a big deal about Obamacare hasn’t changed: The law fundamentally changes the way small business insurance is calculated, requiring insurers to price risks among all small employers in a given region.
That’s great if your workforce is relatively high risk: You are no longer at the mercy of one or two catastrophic family illnesses among your employees. Because policies are standardized, you should also find it easier to comparison-shop for health care insurance for yourself and employees--although not as easy as if the site worked. And if you employ fewer than 25 full-time employees and meet other criteria, you may still be able to apply for the enhanced 50% tax credit for using SHOP. You just can’t apply online through the federal website.
Here’s a politics-free look at what this latest delay really means:
If you have more than 50 full-time equivalent employees, this is a non-event. The SHOP program was designed for employers with fewer than 50 employees who wanted to offer insurance. It may be a non-event as well if you have fewer employees, since the law has always exempted you from having to offer coverage.
If you were thinking of renewing your current coverage, the delay may be a non-event, even if you have fewer than 50 employees. Earlier this month, the Obama Administration backed down from requiring that businesses offering insurance have Obamacare-compliant plans in 2014. So, in theory, as long as you already had a plan in effect as of Oct. 1, you could renew that same plan at any time up to Oct. 1 of next year. In some cases, that could allow to postpone having a new plan in place until late in 2015. Note: This works, though, only if your state regulators (and insurance carrier) will allow renewals of non-ACA-compliant plans next year -- many states have said they will not.
If you have a young work and healthy workforce, renewing your existing policies could allow you to lock in low insurance rates--lower than you might get under Obamacare--for at least another year. On the other hand, plans offered on the SHOP might cost you less for comparable coverage, depending on your industry and the age of your employees. Also, if you want to collect the 50% tax credit available to companies with fewer than 25 employees, you have to apply for coverage through SHOP. So if you have reason to want to apply for coverage through SHOP….
You can still apply online in a dozen states. The delay announced by the Administration applies only to the 36 states where healthcare exchanges, including SHOP, are administered by the federal government. Some states, including Maryland, are having their own Website troubles. But others, most notably California, Connecticut and Kentucky, are more or less efficiently enrolling small businesses online.
If you want to apply through SHOP and you are in one of the 36 states that rely on Healthcare.gov, you still have options. The Healthcare.gov site directs you to apply for coverage through an insurance broker, agent or directly from an insurance company-;which is what you might have done before Obamacare anyway. You can also apply directly to the feds or by phone or mail, although the experience of one small business owner recounted in the The New York Times suggests that the latter can be a slow process.
As a final option, you can also apply over a privately administered healthcare exchange developed independently of Obamacare and run by insurance brokers or insurers, These exchanges may offer our employees more coverage options, but there's one potential drawback: if you qualify for the small business health insurance tax credit, you won't be able to claim it if you buy outside the SHOP. Besides, some users have complained that the private exchanges are as murky and bug-ridden as healthcare.gov. For now, it seems, the U.S. healthcare system is just too much for technology, public or private, to get its arms fully around.