The Affordable Care Act calls for a new insurance marketplace (formerly called an exchange) for small employers to be able to offer plans from several different insurance companies. As it stands right now, the marketplace opening in January 2014 will be limited to a single plan offering, rather than the multiple choice option that was a key advantage and selling point to small employers.
The administration cited "operational challenges" as a reason for the delay. One of the most important tasks of the exchange is to simplify the collection of payment of monthly premiums. An employer through the marketplace will receive one bill for all the employees, regardless of the insurance company the employee selected.
The administration said that the government and insurers needed "additional time to prepare for an employee choice model" of the type envisioned in the law. Insurance companies urged the administration to delay the marketplace offering because the administration did not provide detailed guidance or final rules for the small business exchange until recently, just not in enough time to implement the complex system by January 2014.
"Experience with Massachusetts has demonstrated that employee choice models are extremely cumbersome to establish and operate, " the health insurer Aetna said in a letter to the administration in December.
A few states running their own exchanges indicated that they will be fully operational in January 2014 (California and Connecticut), but Illinois will not be ready at that time due to being in a partnership with the federal exchange.
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