By John Reichard, CQ HealthBeat Editor
May 14, 2014 -- Federal officials plan a test launch in three to five states of a new health insurance exchange website designed for small businesses before deploying it Nov. 15 in the 36 states served by healthcare.gov.
But small business owners are skeptical the long-delayed "SHOP" website will really work as advertised by the end of the year, even with a deliberate plan to debug the site before its official debut.
"If in fact this means it's only going to launch in three to five states, that's not acceptable," says John Arensmeyer, CEO of the advocacy group Small Business Majority.
Business owners also are downplaying the odds that a much touted "employee choice" feature of the site is going to become operational any time soon. It would offer small business workers an online menu of enrollment choices rather than leave the decision to business owners.
The health care law (PL 111-148, PL 111-152) established the Small Business Health Options Program (SHOP) exchange in the hope of creating a pool of small business customers large enough to be attractive to insurers. The thinking was health plans would compete for market share by offering lower premiums.
This year, the SHOP exchange will be available for employers with 50 or fewer full-time workers. In 2016, it expands to those with as many as 100.
A Centers for Medicare and Medicaid Services (CMS) official said the agency "is committed to delivering a robust online SHOP marketplace on healthcare.gov."
The soft launch starts Oct. 20 under a plan outlined late last week by CMS officials. That day, employers in the test states will be able to register for an account, upload a roster of their workers, establish contact with a broker and get a determination whether they're eligible to shop for coverage on the SHOP exchange.
On Nov. 7, they'll be able to browse available plans. And starting Nov. 15 small businesses in all the states served by the federal exchange will be able to actually enroll in plans online.
Currently, SHOP enrolls small businesses in coverage using paper applications, typically with the assistance of insurance agents and brokers.
The plan also outlines another series of milestones and deadlines leading up to the launch. Plans must apply to compete in the SHOP by June 27. In the following weeks, CMS will review the submissions and seek more data as needed before formally certifying them to participate between Oct. 14 and Nov. 3. End-to-end testing of the website with all participating insurers will begin in mid-September and run through early November.
CMS failed miserably to deliver on such timelines when it tried to launch healthcare.gov for individual coverage last fall. Delays in developing and testing the site piled up. But the agency stuck to its Oct. 1 hard launch, triggering multiple rounds of second-guessing about whether it should have been delayed or phased in more gradually.
Insurers and employers aren't reassured that the seemingly more deliberate approach to the SHOP exchange means that it will open on time. "Implementation of the proposed SHOP program will be complex and is untested," the trade group America's Health Insurance Plans said in comments April 21 on proposed exchange rulemaking. "We recommend that issuer testing should begin as early as May of this year."
An insurance industry official, who was not authorized to discuss the matter, said "the timing with the soft launch is okay," but cautioned that there is still functionality that needs to be built out and tested. "Obviously the plans would like testing to begin as soon as possible," the official said.
"Hopefully, this will be a little more successful than the Titanic was the last go around," said Neil Trautwein, vice president of the National Retail Federation, in a telephone interview. Noting federal officials are still manually enrolling people on the SHOP exchange while trying to get the "back end" of healthcare.gov fixed to it can sync individual enrollments with insurance company files, he said, "I'm skeptical they will be able to get this up and running."
The employee choice function adds yet another layer of complexity and appears to be even farther off in the future, Trautwein added. The insurance industry official commented that employee choice "is a bit in flux." CMS has proposed that state regulators have the final say as to whether this option should be available in 2015, the official said .
Arensmeyer said he's okay with the soft launch plan if in fact it means the SHOP website will work in all the healthcare.gov states this fall. But he said CMS hasn't made guarantees. Like Trautwein, Arensmeyer also faulted CMS for having limited contact with small business advocates in recent months. "We've been sensitive to the need to get the individuals exchanges up and running first," he added. But now, "we want them very heavily focused on SHOP."
A CMS spokesman said "We are committed to implementing SHOP in a way that best serves the interests of workers and small businesses and utilizes the lessons of the first year of implementation, which includes piloting in a few states before the full launch on time this fall."
If the agency can't meet that deadline it has one consolation: SHOP enrollment goes year round, unlike that for individuals.