Defects Found Before Debut of Health Insurance Site for Small Businesses

WASHINGTON - The Obama administration has discovered a number of defects in the online marketplace that will offer health insurance to millions of small-business employees, but federal officials said the problems could probably be fixed before the website goes live on Nov. 15.

The website, for businesses with 50 or fewer employees, was created by the Affordable Care Act and was supposed to open Oct. 1, 2013, but officials could not meet that deadline. Since then, they have been trying to build the site.

Testing began last week in Delaware, Illinois, Missouri, New Jersey and Ohio, just days after federal officials gave experts in the industry a preview at a White House meeting.

Small-business owners, employees, insurers and insurance agents welcomed the website for the Small Business Health Options Program, known as the SHOP exchange, but said they had found defects that needed to be corrected.

For example, they said, some health insurance plans approved for sale on the exchange did not show up on the website. The site worked well with some web browsers, like Chrome, but not with others, like Internet Explorer and Firefox. Premiums and other charges for some plans were erroneously displayed as percentages rather than dollar amounts - 350 percent rather than $350, for example. For some households, the principal subscriber was listed as a dependent, or vice versa.

Administration officials said they were working around the clock to fix the problems, and they have apologized to insurers whose plans were not loaded onto the website. They expressed confidence that the small-business exchange, like a new portal for individual consumers, would be ready for its nationwide debut on Nov. 15.

Representative Janice Hahn of California, the senior Democrat on the health care panel of the House Small Business Committee, said she hoped the administration was right. 'We can't afford another bad rollout,' she said, recalling the problems that plagued HealthCare.gov last fall.

Rhett Buttle, the director of private-sector engagement at the Department of Health and Human Services, said small businesses in the five states where testing had begun could establish SHOP exchange accounts, choose agents to handle their accounts, apply for coverage online and upload lists of their employees.

Maria Contreras-Sweet, the new administrator of the United States Small Business Administration, emphasized the importance of the effort. 'Health care remains a top concern for small-business owners across the country,' she said. People who work for small businesses are less likely to have insurance than people at large companies, and they typically pay more for the same or similar coverage.

The SHOP program promised affordable new insurance options, but it got off to a slow start, in part because officials were preoccupied with the individual marketplace. California signed up 1.4 million people through its individual exchange, but its small-business exchange enrolled only 1,700 companies, with 11,500 employees and dependents. In Minnesota, the small-business exchange signed up 190 employers covering 1,500 people.

The range of 'employee choice' varies from state to state, even among states using the federal exchange. In some states, employers can select a level of coverage - bronze, silver, gold or platinum - and allow employees to choose any plan from any insurance company in that category. The different 'metal levels' reflect the generosity of coverage: the percentage of costs paid, on average, by a health plan.

What employers cannot do in the federal exchange is offer employees a choice of levels.

'It would be really nice if we could offer plans from different metal levels,' said Joseph A. Cerino, the owner of an Ohio company that makes adhesive products. Federal officials said that would be difficult to administer and could destabilize insurance markets if large numbers of sicker people enrolled in certain plans.

Emily Black Bremer, president of the Missouri Association of Health Underwriters, said she had run into difficulty using a special portal for agents and brokers with small-business clients.

'I tried it for myself,' Ms. Bremer said. 'I could not get in with my user name and password. There was an authentication issue with my login that caused a glitch.'

Nicholas A. Moriello, the president of Health Insurance Associates in Newark, Del., praised the Obama administration for soliciting the views of agents and brokers. He said he hoped the new website would work as well in practice as it did in a demonstration at the White House on Oct. 24.

But 'unless a company qualifies for the small-business health care tax credit,' he said, 'there is not really a big incentive for employers to go through the SHOP exchange, rather than buying insurance outside the exchange.'

The tax credit is available to certain employers with fewer than 25 employees and average wages of less than $50,000 a year. Companies with fewer than 10 employees and wages averaging less than $25,000 will get the largest tax credits.

In the last year, small businesses have been able to buy insurance through the federal exchange using paper applications. But administration officials said they did not know how many had done so.

'We are not the source of information as far as SHOP enrollment,' said Mayra E. Alvarez, director of the state exchange group at the Centers for Medicare and Medicaid Services. 'We are working with insurers to get that information so that we can better understand the number of small businesses that enrolled in coverage through SHOP.'