Monday the Trump administration announced it would do away with the Affordable Care Act’s (ACA) small-business insurance enrollment system. The online insurance marketplaces were designed to give small business owners more health plan options for their employees, but enrollment has been low. Fewer than 40,000 small business workers are signed up under a HealthCare.gov Small Business Health Options Program (SHOP) plan.
The SHOP program is open to small businesses with 50 or fewer full-time employees and currently serves 33 states. Nationally about 230,000 people are covered through SHOP health plans which is far from the 4 million enrollees estimated by congressional analysts in 2014. The Obama administration also proposed cutting the SHOP enrollment last fall.
Federal health officials said they expect the new rule to take effect in January, and while the small-business enrollment option will be eliminated, companies will still be able to apply for ACA business tax credits and use the Healthcare.gov exchange to determine their eligibility for the program.
According to analysts, the small-business tax credit is only beneficial to a limited number of companies. To qualify, a small business has to have 25 or fewer full-time employees with wages averaging less than $50,000. The credits were designed to cover up to half of the employers’ share of premiums, but expired after just two years.
“Our goal is to reduce ACA burdens on consumers and small businesses and make it easier for them to purchase coverage,” said Seema Verma, administrator of the federal Centers for Medicare and Medicaid Services. “The ACA has failed to provide affordable insurance to small businesses and to the American people. The new direction will help employers find affordable health care coverage for their employees and make SHOP exchanges function more effectively.”
Under the new proposed rules, business owners will be required to work with a separate broker or insurer that is registered with the SHOPs for coverage, while state-run SHOPs will still be able to offer online enrollment to small businesses.
“The irony in some of this,” said Kevin Counihan, chief executive of the ACA’s HealthCare.gov, is that “they’ve now added more steps in the goal of being simpler.”