HRMan Benefits' Blog


Long Delay in Exchange Enrollment for Small Businesses

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A recent article posted by the New York Times reveals some unsettling news for small businesses.  Robert Pear states that the program was created for small business to provide affordable health insurance to their employees and was set to begin in January 2014.  This program was a part of the overall health care legislation that was pushed through Congress three years ago by the Obama administration.  Due to tight deadlines and “operational challenges” the program is being pushed back to start in 2015.  Until that time, many small businesses are wondering where that leaves them during this time of uncertainty.

The intent of this new plan was to create a new insurance marketplace that allows employers to provide workers with a choice of health plans.  Small businesses are currently limited to offer a single plan. There are 33 states in which the federal government will be running these exchanges, also known as the insurance markets.

For small business, the most important aspect to understand is that small employers buying insurance through an exchange will offer a single health plan to their workers next year. Essentially, the exchange exists to allow an employer to pay an upfront cost to the exchange who will then disburse the money to the various insurance companies providing insurance for their employees.  The exchange simplifies the collection and payment of monthly premiums. Originally enrollment for exchanges was set to begin in October of this year and was to be implemented in January. Recently, one of the major health insurance providers Aetna was quoted from a letter to the administration saying, “Experience with Massachusetts has demonstrated that employee choice models are extremely cumbersome to establish and operate.” This is a small reflection of the time spent and costs incurred that will continue to create setbacks and frustration for small businesses and insurance providers.

Pear states that, “Businesses with up to 100 employees will be able to buy insurance in the exchanges. In 2014 and 2015, states can limit participation to businesses with 50 or fewer employees. Companies with fewer than 25 workers may be able to obtain tax credits for up to two years of coverage bought through an exchange.  States can open the exchanges to large employers in 2017.”  A few states are already running their own exchanges despite it not being required by the government yet.


Author: hrmanbenefits

Anderson Thornton Consultants is a full-service insurance brokerage and employee benefits management firm based in Tampa, Florida, servicing businesses all over the United States.

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