Finalization of Rule Allowing for Delay in Employee Choice Disappointing for Small Businesses, Workers

The finalization of a rule today that would allow states to potentially delay a critical requirement that the small business health insurance marketplaces allow employees to choose among multiple insurance carriers is incredibly disappointing for small business owners and their workers.

Small business owners want their employees to be able to choose among multiple insurance carriers when picking a health plan. In fact, the Affordable Care Act clearly requires this feature. The final rule allowing states to possibly opt-out of it for yet another year could harm small businesses by putting them at a competitive disadvantage to big businesses that are able to offer a choice of plans to their employees. In states where the small business marketplaces are being run by the federal government, allowing for further delays in this feature also puts small businesses in those states at a competitive disadvantage to small employers in states whose marketplaces have employee choice. What̢??‰?s more, this component is key in distinguishing the new insurance marketplaces from the outside health insurance market.

We believe delaying this rule violates the law and the spirit of the Affordable Care Act. However, if it does go forward, we expect the Administration to apply a rigorous standard when determining whether a state can delay this feature. The regulation requires that in order to delay the implementation of employee choice a state̢??‰?s insurance commissioner must clearly demonstrate that the choice feature would substantially increase costs for small businesses across the board. Absent making this compelling case, we expect that a state̢??‰?s request to delay the implementation of employee choice in 2015 will be denied.

The rule finalized today postpones for one more year the ACA requirement that employee choice be a required feature of the federally run small business marketplaces. While we are disappointed by this continued delay, we hope the Administration honors its commitment that this will be the last such delay, so next year, when insurance carriers in every state are determining prices for 2016, they will factor employee choice into their calculations.

Small employers have been looking forward to offering more comprehensive health coverage that offers more choices so their employees can choose the plan that works best for them. Allowing states to possibly delay the employee choice option from the health marketplaces doesn̢??‰?t do our primary job creators any favors. We urge the Administration to keep this delay to one year only, and be judicious when determining if states can postpone this feature so small employers and their workers can benefit from the same health insurance choices that larger companies have had for years.