Portion of Small Business Health Options Program (SHOP) Delayed Until 2015

On May 31st, the US Department of Health and Human Services (HHS) issued a final rule delaying the implementation of a significant portion of the Federal Small Business Health Options Program (SHOP) Exchanges until 2015.

The Patient Protection and Affordable Care Act (PPACA) calls for the creation and implementation of health Exchanges for both individuals and small businesses.  These marketplaces were to be operational by October 1, 2013 in time for the open enrollment period for a January 1, 2014 effective date.

The Obama administration announced that SHOPs will only offer one health plan now in 2014, instead of offering small employer groups a choice of several health plans. As reported in the Wall Street Journal, “For transitional purposes we have proposed that in 2014, a state may elect to have businesses choose one plan to offer employees, and in 2015 employees will be able to choose from the full range of plans in the marketplace,” said Fabien Levy, an HHS official.

This delay will apply to states in which the federal government will administer the Exchanges, and makes the requirement optional for state-run Exchanges. The administration cited operational challenges as the reason for the delay.

This announcement has been met with disappointment by many small businesses as it will limit the attractiveness of exchanges to small businesses. The vast majority of small employers want their employees to be able to choose among multiple insurance carriers so employees can pick the plan to best meet their personal needs.

Whether a similar delay will be announced for the individual Exchanges remains to be seen.