CMS pitches end to small businesses using Healthcare.gov

The Centers for Medicare and Medicaid Services is replacing a mandated Affordable Care Act program for small businesses insurance with a new plan that reduces the federal government's role by ending enrollment through Healthcare.gov.

The move affects the Small Business Health Options Program put into place in the 33 states where the federally facilitated marketplace operates under the Affordable Care Act.

Small business enrollment would no longer use Healthcare.gov to enroll. They  would access coverage through an agent or broker, or an issuer of their choice, for plan years beginning on or after January 1, 2018. However, under the proposed plan, CMS would still require employers to obtain a determination of SHOP eligibility through Healthcare.gov.

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Some employers that purchase SHOP coverage would still be able to access the Small Business Health Care Tax Credit.

State-based SHOPs not using Healthcare.gov would continue to operate as they have always done.

The federal SHOP program is now defunct, as few employers took advantage of the SHOP option, CMS said. Out of the nearly 30 million small businesses in the country, less than 8,000, or just .1 percent participated.

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Small businesses with SHOP coverage that took effect in 2017 would be able to continue using Healthcare.gov for enrollment and premium payment until their current plan year ends.

"Our goal is to reduce ACA burdens on consumers and small businesses and make it easier for them to purchase coverage," said CMS Administrator Seema Verma. "The ACA has failed to provide affordable insurance to small business and to the American people. This new direction will help employers find affordable healthcare coverage for their employees and make the SHOP exchanges function more effectively."

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The group Small Business Majority urged the administration to drop this proposal and instead focus on improvements to the ACA.

"If the proposal is finalized, after Nov. 15 small businesses would only be able to window shop for SHOP coverage through Healthcare.gov, and would instead have to enroll by using a broker or buying directly from an insurance company," said John Arensmeyer, founder and CEO of Small Business Majority.

"Forcing small employers to make this extra effort just to enroll in SHOP will make it likely that SHOP usage dwindles to little or nothing." 
SHOP was not as successful as hoped because of a lack in effort to ensure the SHOP marketplaces were robust and competitive, he said. From Small Business Majority's opinion polling, small businesses support key features of SHOP, including employee choice and the small business tax credits.

"By removing the online enrollment functionality, the employee choice feature will become all but impossible for employers to utilize, and it will become more difficult to take advantage of the small business tax credit, which is a setback for small businesses," Arensmeyer said. "Unfortunately, this proposal is just one more example of how the Trump administration would rather undo key parts of the Affordable Care Act that are good for small businesses, their employees and their families, rather than focus on improving and strengthening the healthcare law."

Twitter: @SusanJMorse