What Health Insurance Choices Will Small Businesses Have Next Year?

The ways in which businesses of all sizes will be required to give their employees access to health insurance was supposed to change dramatically next year, but the Obama administration pushed back implementation of the business coverage mandate until 2015. However, that has not stopped the states running their own exchanges from potentially putting similar rules into place for 2014.

Across the country, there are 16 states, as well as the District of Columbia, that plan to run their own health insurance exchanges beginning next year, as opposed to allowing the federal government to operate it either in conjunction with them or altogether. This means that those states will get to determine their own rules, to some extent, for how businesses can choose to opt into such programs, even after the federal government delayed its own small business exchange implementation by a year, according to a report from Kaiser Health News. Previous to that announcement earlier this month, it had already delayed a way for small businesses in particular to allow their workers to choose from a variety of insurance plans, rather than only offering them one.

That latter provision, colloquially dubbed "employee choice" offerings, could still exist in most, if not all, of those 18 state- or district-run exchanges as a means of increasing participation by the smallest businesses within their borders, the report said. A recent study by the Commonwealth fund found that these states are largely going through with these choices despite the lack of a federal mandate to do so in an effort to encourage companies with 50 or fewer employees to get involved with the exchanges in general. Of the 17 states, all but two are currently planning to offer the choice model, and Washington, D.C., will do so as well. Only Idaho has formally announced that it will not do so, while New Mexico is still weighing the decision.

How will these programs work?
In general, the employee choice programs would require employers to pay a specific amount for coverage for every worker they employ, and then allow those people to choose from a number of plans available to them, as a means of finding the one that best suits their personal needs, the report said. When they want to pay a little more than what their employers are willing to cover, they would be able to do so by picking up the difference between the actual cost and their companies' contributions.

However, those within the health insurance industry may be wondering about how these state- or district-run exchanges will be able to pull off these plans and make them work smoothly, as there are still lingering questions about whether individual marketplaces will be all set to run smoothly starting on January 1, 2014, the report said.

"Our strong recommendation for the past three years is that the focus needs to be on getting the individual marketplace up and running and getting the core functions done right," Alissa Fox, a senior vice president of Blue Cross Blue Shield Association, told the news site. "Any functions not critical to that core mission should be put off so we get it right for consumers."

Small business insurance decisions will certainly have an impact on many companies' bottom lines going forward, and for owners who will have to make such decisions in 2014, it might be wise to find more affordable coverage in other aspects. For instance, reducing costs for workers' compensation or liability insurance may go a long way toward shoring up business finances going forward.