Dive Brief:
- HHS will allow some states to delay small business (SHOP) exchanges’ “employee choice” option until at least 2016. (With employee choice, an employer could let employees choose any health plan within a metal tier rather than one plan.)
- The decision, announced by CMS June 10, means 18 of 32 federally facilitated SHOPs will get "relief" in 2015; the rest will join most state-based SHOPs and have employee choice available to small businesses in 2015.
- States had to submit requests for the one-year delay to HHS by June 2. States getting federal approval for the one-year delay include Alabama, Arizona, Illinois and Michigan.
Dive Insight:
Noting that small business markets differ from state-to-state, HHS said it gave states additional flexibility by letting state insurance commissioners request that their state SHOP not implement employee choice in 2015. Federal regulators said this would "smooth the transition" in those states worried that employee choice now would cause insurers to price products and plans higher in 2015 because of their concerns about adverse selection.
House Republicans pounced upon HHS's announcement as yet another sign of poor management and more bad news from the Obama administration concerning the Affordable Care Act and small businesses. House Small Business Committee Chairman Sam Graves (R.-Mo.) said the delay "further limits the breadth of choice originally envisioned" under the ACA, which he says could lead to increased premium costs.
Beyond the political rhetoric, the implications of the delay remain unclear for hospitals in affected states. "A lot with the ACA has unintended consequences, so it remains to be seen how these changes will impact hospitals," Michigan Hospital Association spokesperson Laura Wotruba told Healthcare Dive. "We're struggling right now with high-deductible plans and people not being able to meet their deductibles" for public exchange plans.
