18 states want to delay key part of Obamacare’s small-business marketplace

Eighteen states have decided not to move forward in 2015 with an aspect of Obamacare that provides more choice for employees using small-business health exchanges, a “transitional policy” that Republican lawmakers will point to as yet another delay to the controversial overhaul.

The “employee choice” model allows to choose from any health plan at the actuarial value, or “metal,” level that has been selected by their employer on the Small Business Health Options Program (SHOP), according to the Centers for Medicare and Medicaid Services (CMS).

However, the option was delayed by one year — before Obamacare launched in earnest last year — in states that rely on the federal health exchange system. Many state-run exchanges already offer employee-choice.

In late May, the Obama administration issued a rule that offers “additional flexibility” to state insurance commissioners who do not want to implement employee-choice out of fears it could disrupt their risk pools.

“This transitional policy applies to 2015, as HHS expects that states and issuers will be able to learn from the experiences of issuers in those SHOPs that have decided to implement employee choice in 2015 to prepare for 2016,” CMS says on its website, above a list of states in the federal Obamacare marketplace and their decisions on employee-choice for 2015. “HHS is committed to implementing employee choice in a way that learns from early experience and ensures its success.”

Rep. Sam Graves, Missouri Republican, said he is growing impatient with delays to the program and other facets of Obamacare.

“Today’s announcement from CMS is yet another in a long line of bad news and signs of poor management of SHOP,” said Mr. Graves, who chairs the House Small Business Committee. “HHS and CMS haven’t answered my inquiries regarding the development of SHOP and it appears that the dysfunction is worse than many of us thought.

Among states using the federal exchange, 18 opted not to implement choice in 2015: Alabama, Alaska, Arizona, Delaware, Illinois, Kansas, Louisiana, Maine, Michigan, Montana, New Hampshire, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota and West Virginia.

“The remaining 14 states with a Federally-facilitated SHOP will join most State-based SHOPs and have employee choice available to small businesses in 2015, doubling the number of states offering this option,” CMS says. “In 2015, nearly two-thirds of Americans will live in states where small business workers can choose a health plan rather than have their employer do it for them.”