Small employers told to stay off health website

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WASHINGTON -- The Obama administration on Wednesday announced a one-year delay in a major element of the new health care law that would allow small businesses to buy insurance online for their employees through the new federal marketplace.

It was yet another setback for the rollout of the health care law and resulted, in part, from the well-documented problems of the insurance marketplace website. Administration officials said they had to focus on the basic functions of the website, so that individuals could shop for insurance, before offering online enrollment for small businesses. In the meantime, businesses and their employees can apply through brokers.

Many employees of small businesses are uninsured, and the businesses themselves are much less likely than big companies to provide coverage to workers and their families.

The latest delay, coming just as the White House was boasting of major improvements in the health insurance website,, opens the door to more complaints about the health care law and could increase pressure to delay other provisions.

"The president bit off more than he can chew with this health care law, and small businesses are now forced to bear the consequences," said House Speaker John Boehner, R-Ohio. "Business owners across the country are already having health care plans for their employees canceled by this law, and now they're told they won't have access to the system the president promised them to find different coverage. Instead, they'll have to resort to a system you'd expect to see in the 1950s."

It was the second delay for small businesses. The administration had previously delayed online enrollment for them to the end of this month from Oct. 1.

The date has now been pushed backed to November 2014 for coverage that takes effect in January 2015, according to the Health and Human Services Department.

The announcement, just before Thanksgiving, was reminiscent of the way the White House announced, just before the Fourth of July weekend, a one-year delay in the requirement for larger employers to offer health insurance to employees.

The marketplace for small businesses -- the Small Business Health Options Program, or SHOP exchange -- was one of the few provisions of the 2010 law with some Republican support, and it was originally championed by Sen. Olympia Snowe, R-Maine.

John C. Arensmeyer, the chief executive of Small Business Majority, an advocacy group that supports the health care law, said, "It's disappointing that the online portion of the federal small business marketplace through will be delayed, and it's important it get up and running as soon as possible."

The marketplace, he said, "is still the most important provision in the Affordable Care Act for small businesses."

Some small businesses may qualify for tax credits worth up to 50 percent of their premium costs. The tax credits will be available only for plans purchased through the small business exchange.

While the online exchange is being delayed, Amanda L. Austin, a lobbyist at the National Federation of Independent Business, a trade group, said, "many small businesses face higher premiums in 2014 because of new taxes, including a new federal tax on the health insurance they purchase."

Kathleen Sebelius, the secretary of health and human services, said the website was "vastly improved each and every day," with hardware upgrades and software fixes that produced lower error rates and faster response times for users.

An employer using the SHOP exchange must offer coverage to all full-time employees -- generally those working at least 30 hours a week, on average.

In a separate announcement, officials at the Health and Human Services Department said Wednesday that they would replace the contractor that manages computer servers handling the enormous load of data collected by

Terremark, a subsidiary of Verizon Communications that now provides the service, will be replaced in March by Hewlett-Packard, officials said. A spokeswoman at the Centers for Medicare and Medicaid Services said the change had been planned at least since July. Issues related to the raw computing capacity of the servers provided by Terremark have been cited as a factor in the website problems. A spokesman for Verizon declined to comment.


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