Exchanges, but not as envisioned

Politco Pro | Jason Millman | April 8, 2013

Even though the Obama administration is delaying a key component of
federally run small-business exchanges, some states building their own
exchanges say they’re on track to have the program running next year.
The feds last month said the 33 exchanges it will run
next year won’t allow employees whose companies use the exchanges to
choose their own health plans until 2015. Instead, they’ll have to
accept whatever plan their employer selects for them.
The new Small Business Health Option Program exchanges, known as SHOP
exchanges, are hoping to draw in firms by offering greater health plan
choices for employers and their workers, and the so-called employee
choice model was seen as a major incentive for businesses to seek
coverage on the SHOP exchanges.
But more than half the country won’t have that option right away.
The Obama administration said states running their own exchanges in
2014 can still offer employee choice though, and at least a few states
aggressively implementing Obamacare — such as Minnesota and Oregon — say
they’re moving ahead with those plans right away. They say it’s an
essential draw to the SHOP exchange, though they acknowledge it won’t be
easy to pull off.
Employee choice generally works like this: Workers whose employers
decide to purchase coverage through the SHOP exchange get a defined
contribution from the firm, and they then put the money toward an
exchange health plan of their choosing. Without employee choice, the
employer chooses the health plan for its workers, much like how the
employer-sponsored insurance system works now.
Rocky King, executive director of Oregon’s exchange, said employee
choice was key for generating bipartisan support for a state-run
exchange two years ago.
“It became really clear to us in order to get the bipartisan support
we needed that we need to put forth something more than what was just
out there today for small employers,” King said.
But King also knew it wouldn’t be easy from an operational
standpoint, so he said the exchange staff got to work right away on the
technical infrastructure necessary to support employee choice. Under the
program, the exchange takes the employer contribution directly and then
sends it to the carrier the employee selected.
“We knew that was the most challenging and most difficult to implement,” King said.
The Obama administration announced a month ago
that it would delay the employee choice option in federal-run
exchanges, but recent news reports about the decision have sent
state-based exchanges into damage control.
April Todd-Malmlov, executive director of the Minnesota exchange,
said her office was bombarded with questions after reports of the
federal delay grew.
“They really want this and wanted to make sure we were really doing
it,” said Todd-Malmlov, adding that the Minnesota exchange, known as
MNsure, has emphasized building the SHOP exchange.
“Having employee choice and doing defined contribution has been
something that Minnesota employers have wanted to do for a long time,”
she said.
Colorado is another state last week that reiterated plans to install employee choice right away, despite the federal delay.
“Colorado is on track to help small employers provide a range of
health plan options to employees through our new online health insurance
marketplace that will open in October,”Patty Fontneau, executive
director of the Colorado exchange, said in a statement on Thursday.