Obamacare’s Small Business Exchanges Get Watered Down

President Obama boarding Air Force One

Photograph by Jim Watson/AFP via Getty Images

President Obama boarding Air Force One

If the Obama administration wants to convince skeptical small business owners that health-care reform will improve the existing system, this news won’t help: A key part of the law that would let small employers offer workers a menu of health plans through state health exchanges is being delayed by a year, the New York Times reports. For 2014, small businesses shopping for policies in many states will be limited to choosing a single health plan to offer their workers.

Count this as a political victory for states that wanted to thwart Obamacare by not building their own exchanges. The Affordable Care Act envisioned each state setting up a marketplace in which  individuals and small businesses could shop for health insurance, starting in 2014. But 26 states, most in Republican control, left it up to the federal government to build their exchanges. Companies with fewer than 50 employees in those states will have to wait an additional year, until 2015, for the exchanges to give employers the flexibility they’re supposed to.

The government proposed delaying this part of the law three weeks ago. Some states that have already been at work building their exchanges are ready to offer the full menu of plans, even with Washington delaying the requirement that they do so. In Nevada this fall, companies using the Silver State Health Insurance Exchange will be able to offer their employees multiple plan choices, spokesman CJ Bawden says. The company makes a single premium payment for all its workers buying policies, and the exchange will distribute it to different insurance carriers, depending on how many employees enroll in each plan.

The feds apparently aren’t yet ready to build that power into the exchanges they’re running. (The U.S. Department of Health and Human Services did not immediately respond to a call and an e-mail seeking comment.) Add this failure to the frustration over Obamacare’s complicated tax breaks and to widespread confusion over how the law works.

The changing regulations are frustrating small business owners. Chuck Traywick, who runs Infotronics, a Charlotte, N.C., tech consulting firm with five employees, says he sees his premiums rising, with little on the way from Washington to help. “Most business people, if [the government] tells them what the rules are, they’ll deal with it,” he says. “They’re not telling us what the rules are. They don’t know themselves.”

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