SHOP Delays and Confusion for Small Business

November 6, 2013

pic-health-cost-blueAmidst the widespread confusion over the Patient Protection and Affordable Care Act’s (PPACA) online portal, one key constituency still has yet to receive clear directions on how to enroll: small business. The Small Business Health Options Program (SHOPs) was initially delayed by one month, and now could see even further delays.

While the business mandate for companies with more than 50 employees to provide insurance was officially delayed until 2015, the law still provides small businesses the option of signing up their firms under the SHOPs. However, just prior to the opening of the exchanges on Oct. 1, the administration announced a delay to the SHOPs to Nov. 1. While the online SHOP portal is technically up and running, small-business owners in Federally-Facilitated SHOP (FF-SHOP) states must first complete an online registration, then fill out an application which must be printed and mailed in order to determine if they’re even eligible for that SHOP. There is no clear deadline by when small-business owners should expect to hear back, but the website cites mid-November.

Those small businesses in states which opted to run their own SHOP (18 states chose this option with the remainder opting to utilize the FF-SHOP) may experience something different altogether. Some states already have their SHOPs up and running while others—such as Maryland—have announced delays.

The mid-November timeframe cited by the FF-SHOP website was called into question when, in her testimony before the House Ways and Means Committee on Oct. 29, Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner responded to questioning about the SHOPS and pointed to the end of November for a fully-functioning FF-SHOP as a more likely timeframe.

In a letter to Health and Human Services Secretary Kathleen Sebelius, House Small Business Committee Chairman Sam Graves (R-MO) asked for clarification regarding online enrollment timetable, stating, “…if the SHOPS will not be operating until November 30, 2013, and, as Administrator Tavenner testified, small business owners must enroll by December 15, 2013 for policies to be effective on January 1, 2014, that leaves precious little time – a mere 16 days — for an already busy and burdened small business owner to learn about various insurance plans and make a decision so that they have coverage in place on January 1.”

This limited timeframe is problematic for two key reasons: 1) many small-business owners have received notification that their existing health insurance plan is being cancelled by the end of the year; and 2) starting in 2014, the only way to get the small-business health care tax credit is by purchasing through the SHOPs. Back in June, the Government Accountability Office (GAO) released a report citing the fact that, to that point, many of the core functionalities of some of the SHOPS were already behind schedule.