Small response to Obamacare’s small business exchanges

The latest issue of Bloomberg Businessweek details the sluggish response to new small business health insurance exchanges tied to the federal health care law.

Small business enrollment in Obamacare health plans is off to a slow start. The debut of the federal insurance marketplace for companies with fewer than 50 employees has been delayed till November. Only 14 states managed to get their websites up and running by the original October deadline. And in those that have, the response has been tepid: In Kentucky, just 14 companies have signed up. Colorado’s marketplace has enrolled 127 businesses and Connecticut’s just 106. “We’ve dropped the ball on the small business side,” says Kevin Counihan, chief executive officer of Connecticut’s health exchange, Access Health CT. “This is an area where we need to execute better.”

Under the Affordable Care Act, companies with 50 or more workers must offer affordable health insurance by 2015 or face a fine of as much as $3,000 per employee. Businesses with fewer than 50 employees—which employ 31 million people combined, according to 2011 U.S. Census Bureau data—aren’t required to offer medical coverage. But if they do, their plans must now meet Obamacare standards, which mandate coverage for maternity care and prescription drugs. The 2010 health-care law created the Small Business Health Options Program (SHOP) as a tool to help small business owners shop for coverage compliant with the new rules. …

… John Humkey, owner of Employee Benefit Associates, an insurance broker based in Lexington, Ky., says he’s signed up only one small business client, a local microbrewery, for Obamacare. The company primarily wanted to take advantage of a tax credit worth as much as 50 percent of the cost of premiums for enterprises that can meet certain conditions. Most business owners aren’t interested enough in the credit to jump through the hoops, Humkey says: “They’re working hard to manage their business, their focus is not on trying to understand the health-care law in order to put together a benefit package.”

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