Maryland is pushing back the launch of its small business health exchange by at least three months, while the federal government is giving states another year to fully implement the program.
The state’s health department changed the start date for businesses to enroll in the small business exchange from October to January 2014. The state’s decision comes after the federal government said it would give states until January 2015 to get up and running a key piece of the small business exchange that gives employees more insurance options.
The health insurance marketplaces for both small businesses and individuals were supposed to begin enrollment this October for coverage that would take effect in January. The individual exchange is still expected to stick to that timeline. The exchanges are part of the federal Affordable Care Act.
Health Secretary Joshua Sharfstein said the state decided to delay the small business exchange to give leaders more time to prepare a complex information technology system and train brokers who will be key to bringing businesses to the exchange.
“We did what we thought would make the most sense,” Sharfstein said.
The small business exchanges are similar to but separate from the individual exchanges. Both will serve as marketplaces for people to shop for health insurance and will offer subsidies or tax credits. The small business exchange is expected to be significantly smaller than the individual exchange. A study by the University of Maryland, Baltimore County’s Hilltop Institute predicted about 8,500 people would get insurance through the small business exchange in its first year, compared with 138,764 people expected to buy insurance through the individual exchange in 2014.
Maryland’s small business exchange will be a partnership between the state and the existing insurance broker community, Sharfstein said. Exchange leaders think that they will be able to bring in more businesses to the exchange if they partner with the brokers who work with small business to offer it as an option, rather than relying on small business owners to seek out the exchange.
“The vast majority of small businesses buy through third party administrators,” Sharfstein said. “We don’t want to disrupt that.”
Waiting to begin enrollment until January, which means insurance wouldn’t actually take effect until months later and could reduce the number of businesses that opt to participate in the exchange next year. Businesses whose insurance plans renew on the first of the year will have to settle on a new plan before the exchange is running.
Getting as many people enrolled as possible in the first year has been a key message for the individual exchange, but is not as crucial to the small business exchange, Sharfstein said. Health leaders envision the small business exchange’s membership more “slow and steady” than the individual exchange.
The individual exchange is expected to grow its members from 138,764 in 2014 to 273,586 in 2020, a 97 percent increase, according to the Hilltop report. Meanwhile membership in the small business exchange is supposed to grow 20 percent, from 8,469 people in 2014 to 10,157 in 2020.