State weighing delay of Jan. launch for small business health exchange

By Glynis Kazanjian

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An abrupt cancellation of a series of small business exchange workshops by Maryland health officials has fueled speculation that for the second time this year the launch of the small business health insurance exchange, known as SHOP, will be delayed.

“We postponed the [workshops] to focus our outreach efforts on the individual exchange,” said Maryland Health Benefit Exchange Communications Director Danielle Davis.

There have been persistent rumors of a delay, and there was a meeting Friday by a select group of exchange officials, advisory committee members and some health insurance brokers, who reportedly discussed a number of scenarios surrounding a delay to the Jan. 1 SHOP launch date.

“It doesn’t look like it’s going to open Jan. 1,” said a health care professional told about the meeting.

As many as 85,000 Maryland small businesses will qualify to shop for health insurance plans when the small business exchange opens. Seventy-five thousand are eligible to apply for federal tax credits. Health insurance companies have also begun dropping coverage for policies that do not conform to rules in the Affordable Care Act, according to published reports.

Impact of delay had been discussed

Becca Pearce, executive director of the Maryland Health Benefit Exchange, did not confirm or deny the Friday meeting, but instead provided Mayland Reporter with the following response:

“Last Monday, the Producer Advisory Council held a meeting that was open to the public,” Pearce wrote in an email. “Among the topics discussed was the potential impact of launching the SHOP later than currently planned. What we heard from producers was that the impact on the small group market would be minimal.”

“We frequently seek input from our advisory councils on a wide range of topics,” Pearce continued. “Seeking such feedback does not necessarily mean we will adopt a change.  The Maryland Health Benefit Exchange board would have to adopt a change to the opening of SHOP, and it has not done so.”

Sources said problems plaguing the launch of the individual health insurance exchange and an attempt to keep “bad news down” were brought up at Friday’s meeting as reasons to potentially delay the launch of the small business exchange. As of last Wednesday, the Maryland Health Connection, the state’s health insurance marketplace, had enrolled only 3,100 households since opening Oct. 1.

Maryland’s enrollment problems and IT glitches have mirrored those of the federal health exchange. News of another major problem associated with the Maryland Health Connection could affect consumer confidence and provide further reasons to delay implementation.

Lack of confidence in the roll out

“Unfortunately the federal rollout of the health care exchange program has added to the growing uncertainty and lack of confidence in this government healthcare program,”said Ellen Valentino, Maryland state director of the National Federation of  Independent Business. “I suspect that lack of confidence will likely trickle down to the state level. It will be interesting to see if the Maryland SHOP exchange for small business can be rolled out as planned in January. We certainly hope so and are prepared to inform our membership.”

Along with the cancellation of SHOP workshops, which were apparently removed from the exchange website without any notice, Tequila Terry, the exchange director responsible for partnerships with the commercial insurance industry no longer works for the health benefit exchange.

According to an Oct. 22 Insurance and Financial Advisor article, Terry’s last day with the agency was Oct. 18. Pearce said the exchange knew about Terry’s  decision to leave several weeks prior to it becoming public and she left for personal reasons.

Delay would not surprise a major player

Kathy Simmons, who sits on the Exchange Implementation Advisory Committee (IAC), which oversees the individual and small business exchanges, said she was unaware of any meeting held last Friday.

“If there was a meeting, I think I would have been notified,” Simmons said. “But, if it was a board meeting, I don’t necessarily get notified of those.” Simmons is CEO of Group Benefit Services, a major benefits provider contracted by the exchange to help administer the exchange.

Simmons also said a SHOP advisory committee meeting scheduled for Thursday had been cancelled without being rescheduled. She also had no knowledge of the cancelled SHOP workshops.

“Considering the difficulties they’ve had with the individual exchange, it would not surprise me that they would delay it another month or two, just to make sure the same types of technical difficulties aren’t experienced in the SHOP,” Simmons said.

Last spring Maryland Health Secretary Joshua Sharfstein announced the exchange would push back the Oct. 1 SHOP launch to Jan. 1.