A year after the Obama administration temporarily shelved an unfinished part of HealthCare.gov intended for small businesses, it has opened with reports of only modest technical flaws — but with doubts that it will soon benefit the millions of workers at little companies with inadequate health insurance or none at all.
Insurance brokers are, at times, having trouble getting into their accounts and, in scattered cases, are not showing up in the computer system’s lists of local insurance professionals available to coach small businesses. More broadly, interviews with brokers and others suggest that, in the two weeks since the marketplace’s health plans went on sale for 2015, interest within the niche they are intended to help seems scant.
During the first week, that part of HealthCare.gov drew 200,000 visits, compared with more than 1.5 million people who looked at the Web site’s health plans for individuals, according to the Centers for Medicare and Medicaid Services (CMS), the branch of the Department of Health and Human Services overseeing the online insurance marketplaces. CMS officials would not provide figures on how many small businesses in that first week decided to offer workers coverage through the health plans created for them — or how many workers, in turn, have bought it.
But John Arensmeyer, chief executive of Small Business Majority, a group eager for this part of the marketplace to succeed, voiced a widespread view. “We are not expecting a massive surge,” he said.
The fate of the Small Business Health Options Program, known as SHOP, has attracted less attention than the part of HealthCare.gov designed for individuals who cannot get insurance through their jobs. But when Congress enacted the Affordable Care Act in 2010, the idea of providing a new breed of health plans to small companies was one pillar of the law’s strategy to usher in the largest expansion in health insurance the government had ever attempted.
Employers have been the main conduit to health coverage for generations, but that model has not always worked well for people employed by little companies. With few employees to pool the costs if someone gets sick, insurance for small businesses has tended to be expensive, and small-business owners for years have been backing away from offering it. About half of workers at companies with fewer than 50 employees — the group for whom the SHOP marketplace is intended — are offered insurance by their bosses. More than one-fourth are uninsured.
The idea behind this part of the health-care law was to create marketplaces in which small businesses would be banded together, prompting insurers to offer better and more affordable coverage. And employees would get a choice of health plans — something common at large companies but less so at small ones. Unlike with the rest of HealthCare.gov, which is open now for a few months for individuals to buy insurance, there is no specific insurance-buying season for small businesses, but the SHOP plans for 2015 went on sale on the same day as individual health plans.
Administration officials have been working lately to pump up interest in these health plans. In late October, the White House hosted insurance brokers specializing in small-business customers for a demonstration and a pep talk. And federal health officials this fall allowed brokers and small employers in five states an early peek at that part of the site to drum up interest and check how well it was working.
“It was rather good, compared to nonexistent,” said David Mordo, a longtime insurance broker on the Jersey Shore who was part of the group invited to the White House and works in one of the five early states.
Last year, in the 32 states that are relying on the federal small-business marketplace, SHOP insurance plans existed but could not be purchased online. Federal health officials have declined to say how many people bought them for 2014. In the 18 states that run their own small-business marketplaces, 76,000 people were enrolled as of June — a small fraction of the 2 million SHOP customers this year that congressional budget analysts estimated in their most recent forecast.
“It is an emerging market,” said Andy Slavitt, CMS’s principal deputy administrator. “I don’t know how long it takes new offerings to ramp [up] and accelerate.”
Administration officials are heartened by data, analyzed by the White House Council of Economic Advisers, showing that the number of health plans participating in the small-business marketplace has increased slightly from last year, while monthly insurance premiums have been relatively stable.
Still, interviews with brokers, state health-care officials and small-business organizations suggest that progress this year is likely to be slow — for reasons rooted in both the computer system and a few of the Obama administration’s decisions.
Lingering flaws
Confidential federal documents show that testing of parts of the online SHOP marketplace is still going on. Aaron Albright, a CMS spokesman, said the portions of SHOP that companies and workers need to explore health plans and choose coverage already have been “thoroughly tested,” including in the five states given early access to the Web site.
Brokers in those states say they noticed several problems, only some of which have been fixed. At first, for instance, the Web site would not allow business owners to progress to the next screen until they submitted an employee number for each worker they were offering coverage — even though many small companies do not assign numbers to their employees.
Still uncorrected is a section that asks employers how long they want new employees to wait before becoming eligible for insurance. Under the law, employers can require a 90-day wait, but the computer system does not allow more than 60 days. “We started scratching our heads and saying, ‘Where is the 90 days?’ ” Mordo said.
Some brokers say they and their clients are easily getting onto the Web site. Others still are having trouble. Last year, Sam Fiorentino, a broker near Cleveland who is vice president of the Ohio Association of Health Underwriters, created PowerPoint presentations to teach other brokers how to help customers under the Affordable Care Act. This year, Fiorentino has had his own problems using HealthCare.gov.
First, the Web site did not recognize his password. Then, a fishing buddy who runs a small machine-tool cutting company told Fiorentino that he wanted to designate him as his broker from a drop-down list on the site, but Fiorentino’s name did not appear. After many calls to federal phone numbers, Fiorentino discovered the problem: The computer system was not accepting his “national producer number” — a kind of ID number the Web site requires — because an insurance agent in Michigan had already entered his number by mistake. A week after finding the root of his problem, Fiorentino still has not been able to get it fixed.
“Now my clients can’t find me. Therefore, they can’t buy from me right now. I might as well not be in business,” he said. “Unbelievable.”
Requirement is waived
Beyond such technical problems, some brokers and others say, the SHOP marketplace’s popularity has been blunted by decisions the Obama administration has made. For instance, administration officials last year postponed a requirement under the law that small-business employees be guaranteed a choice among health plans in their areas — a main selling point of SHOP. This year, a few months before the SHOP part of the Web site was to open, federal health officials said states could avoid that requirement again for the coming year. Of the 32 states relying on the federal SHOP marketplace, 18 decided to continue to skip the choice requirement.
Sandy Praeger, Kansas’s insurance commissioner and the head of the health insurance section of the National Association of Insurance Commissioners, said her state and others thought it was best to wait until it was clear that the computer technology worked well. Plus, insurance companies that already had some SHOP customers were not eager for more competition.
But the decision drew protests from some of SHOP’s advocates, who argued that it would deter small businesses that already have insurance elsewhere from exploring the new options. “We made our case at the highest level,” meeting with CMS’s administrator, Marilyn Tavenner, said Arensmeyer, of Small Business Majority.
Without a choice of plans, said Lee Wilbers, an insurance broker in Jefferson City, Mo., the only insurance available to his clients through SHOP is a Blue Cross Blue Shield plan with a smaller network of doctors than a health plan the same insurer is selling to small businesses outside the federal marketplace. “Most of our clients have kept what they had,” Wilbers said.
The main businesses that might benefit from the new marketplace, brokers said, are the relatively few — with fewer than 25 workers and specified salary levels, and meeting other federal rules — that qualify for tax credits through the SHOP exchange. Those credits last for just two years.
“You really run out of reasons to go into the SHOP,” said Nicholas Moriello, a broker in Newark, Del., who runs that state’s largest independent health insurance agency. “We’ve only had a small handful of businesses dipping their toe in the water. Less than five.”
A better deal?
Figuring out whether SHOP coverage would be worthwhile is not always easy. Ryan Epple, a veterinarian in Phillipsburg, N.J., has been trying. Six years ago, he took over Harmony Animal Hospital, which his father had run for three decades next to the house where he grew up. Suddenly, he was a small-business owner with three other veterinarians, other staffers and health insurance costs that were spiking.
The coverage he inherited from his father was “really stellar,” Epple said, but he kept cutting it, year by year, to blunt cost increases. So last year, when he heard about the new small-business insurance, he tried to go onto HealthCare.gov — “an endeavor that didn’t get very far,” he said, with that part of the Web site not yet working. This time, he had some trouble getting HealthCare.gov to recognize his e-mail address, but he eventually switched to a different address and was able to create an account.
“They have some nice coverage,” he said, but the best plans cost more than he is paying now. The site shows that some plans are about the same price, but he wants to confer with his accountant and Mordo, his broker, about whether the temporary tax credit he could get through SHOP would save him more money than tax deductions he already can take for insuring some of his workers outside the marketplace.
Will he become a SHOP customer? “I am solidly not sure,” he said.