Online Health Exchange for Small Businesses Delayed

Online Health Exchange for Small Businesses Delayed Until November 2014

An HHS official confirmed today that the online health exchange for small businesses is being delayed until late 2014. The Small Business Health Options Program, or SHOP Exchange, was developed to give small businesses a simpler and more efficient way to buy insurance coverage for their workers – and small businesses will still have the option to purchase coverage through the new marketplace but will not be able to do so online. Until November 2014, employers with fewer than 50 workers will need to work through a broker or agent to buy health plans for their employees.

With this new delay, small businesses will likely see little change in the way they purchase health insurance until 2015. They will, however, need to use the SHOP exchange if they want to access a health law tax credit available to employers with fewer than 25 employees. That tax credit first became available in 2010 regardless of where a company purchased coverage. Beginning in 2014, companies will need to buy through the marketplace to continue receiving that financial assistance, worth as much as 50 percent of their workers’ premiums.

This federal delay effects the 36 states where the federal government is running the health insurance exchange. It does not change the small business options in the 14 states and the District of Columbia that are running their own exchanges.