The U.S. Department of Health and Human Services has delayed online SHOP enrollment on the federal exchanges for one year. Enrollment will continue via paper applications and HHS is suggesting using agents and brokers as well as direct enrollment through insurers as alternatives for signing up.

The online component was previously delayed until “sometime in November [2013]” according to numerous HHS and U.S. Centers for Medicare and Medicaid Services employees. But more recently, CMS spokeswoman Julie Bataille has dodged reporter questions about whether it will be ready by Nov. 30. She confirmed the news on a Wednesday media call, noting it only affects exchanges run by the federal government.

Bataille said that many small businesses are already served by agents and brokers and it is a “particular mechanism [and] something familiar for the small business community.”
When asked to explain the reason for the year-long delay, she said CMS has prioritized the functionally “that would enable consumers individually to shop and enroll in coverage. … Those are things we put in place October 1 that we continue to make sure we improve.”

Brokers EBA has spoken with aren’t all that interested in enrolling groups on SHOP anyway, with many small groups looking first at sending employees to the individual exchanges. "We've had some small — group customers — not a lot telling us that they're going to dump their plan and send their employees to the individual market," says Kelly Fristoe, president of the Texas Association of Health Underwriters and owner of Financial Partners in Wichita Falls, Texas. "So we've made some arrangements with those employers to be able to be the agent that sits with those employees. They're going to let us have time with their employees to educate them on purchasing insurance through the marketplace and qualifying for a subsidy."

POLITICO, who obtained an HHS memo announcing the delay, reported that the memo gave the following reason for the delay: "We've concluded that we can best serve small employers by continuing this offline process while we concentrate on both creating a smoothly functioning online experience in the SHOP Marketplace, and adding key new features, including an employee choice option and premium aggregation services, by November 2014.”

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) called out the administration for another delay, specifically its timing, right before a holiday.

“The administration announces yet another carefully timed delay of its signature health care law. Just as it did over July 4 while we celebrated our independence, today the administration is doing its best to bury the latest confirmation that this law was not ready for prime time,” Upton said. “For months officials looked us in the eye and told us everything was ‘on track,’ but we have now learned through our investigation that internally the administration had serious concerns about its ability to deliver on Oct. 1.”

The National Federation of Independent Businesses said that this delay “is a disappointment, but not a surprise.”

“Small businesses continue to be low on the priority list during the Obamacare implementation process. It probably matters little to people in Washington that the failure to get the small business exchanges online adds yet another onerous paperwork requirement for job creators,” said Kevin Kuhlman, NFIB’s manager of legislative affairs. “The continued delays add to uncertainty and contribute to the decision of many owners to take early renewals of their small-group plans.”

The Obama administration is just three days away from its self-imposed deadline for having work for the “vast majority” of consumers who want to sign up for individual plans. For a behind-the-scenes glimpse of how Obama and his team are monitoring progress visit our story here

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