A marketplace that will allow small businesses in Arkansas to shop for health-insurance plans for their employees would be missing what some consumer advocates describe as a key feature under a delay proposed by a federal agency.
Mandated by the 2010 Patient Protection and Affordable Care Act, SmallBusiness Health Options Program exchanges in Arkansas and other states will provide a website where businesses can compare the prices and benefits of different insurance plans.
The law requires the exchanges to offer a feature allowing businesses to choose a level of coverage for their employees, who would then be able to enroll in any plan on theexchange within that coverage level.
But the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services said in a notice published last month that it was considering delaying that part of the exchange until 2015.
In 2014, the agency said in the notice, businesses would be able to select only one plan for their employees. The agency cited the concerns about whether the exchanges and insurance companies would be ready for the more complex system when enrollment starts Oct. 1.
Washington, D.C.-based Small Business Majority is among the advocacy groups that have urged Health and Human Services Secretary Kathleen Sebelius to reconsider the proposed delay.
Rhett Buttle, the group’s vice president for external affairs, said one goal of Congress in mandating the exchanges was to allow small businesses to offer benefits similar to their larger competitors, many of which already offer multiple health plans to their employees.
Without the feature allowing them to offer multiple plans, small businesses will be less interested in participating, he said.
“We see it as a bump in the road,” he said.
The delay would be mandatory in states, such as Arkansas, that are establishing exchanges in a partnership with the federal government, as well as those that will have federally run exchanges.
Claire McAndrew, a senior health-policy analyst for Families USA, which advocates for health-care consumers,said most of the 18 states that are establishing exchanges plan to offer the multiple-plan option for small-business employees in 2014, even if it’s not a requirement.
In other states, such as Arkansas, she said the small-business exchanges will still be useful - giving business owners an easier way to compare prices and features of different plans.
Businesses with fewer than 25 employees and those that pay average wages of less than $50,000 also can claim a tax credit of up to half of their premium expenses if they help their employees buy coverage through the exchange.
“We think it’s an issue of information,” McAndrew said. “We want to make sure all of this buzz about this delay isn’t taking over, in a small employer’s mind, the other advantages of using the [Small Business Health Options Program] exchange.”
In Arkansas, the exchange initially will be open to businesses with 50 or fewer employees. In 2016, it will expand to businesses with up to 100 employees.
A 2011 study commissioned by the state Insurance Department predicted that more than 48,000 employees of businesses with 50 or fewer employees would enroll in coverage through the small-business exchange for coverage beginning in 2014.
Arkansas officials also estimate that more than 350,000 people would enroll for subsidized coverage through a separate exchange being established for individual consumers. That includes more than 250,000 low-income people whose premiums would be paid by Medicaid under an expansion of the program approved by the state Legislature last week.
Businesses with 50 or more employees will be required to pay fees if their employees obtain subsidized coverage through the exchange for individual consumers. Smaller businesses are exempt from the fees.
Insurance Department spokesman Heather Haywood said she doesn’t expect the delay in the multiple-plan option for the small-business exchange to reduce business owners’ interest in participating.
“It’s a simplified shopping experience,” Haywood said. “Instead of having to get on the phone and visit and call all the different providers, you’ve just got it in one place where you can make the selection.”
Insurance companies have until June 30 to apply to offer coverage through the exchanges. The approved plans will be announced Sept. 4.
David Cockcroft, who manages the finances for WordsWorth Books & Co. in Little Rock, said he would be disappointed if any part of the 2010 health-care law is delayed.
The bookstore provides coverage to its three full-time employees, including Cockcroft.
“Health insurance is one of our highest fixed costs, and it keeps going up,” Cockcroft said. When the store’s policy comes up for renewal early next year, he said, “we’ll be eager to look for anything that helps reduce our cost.”
Jay Chesshir, chief executive of the Little Rock Regional Chamber of Commerce, said many businesses are waiting for more information on the options that will be available.
“There is just so much uncertainty,” he said. “People just don’t know where to turn yet.”
Front Section, Pages 1 on 04/21/2013