For now at least, the employer mandate isn't going anywhere. But small businesses are flocking to a new market, leaving behind traditional models.
As public insurance exchanges expand their availability and pitch new federal subsidies to employers, small businesses are cancelling old plans and turning to new options.
Across its Anthem Blue Cross insurers in 13 states, WellPoint has lost 300,000 lives in its small group segment this year, leaving behind about 1.5 million who could also leave for either public or private exchanges.
"We're managing to that reality," said WellPoint CEO Joseph Swedish in a third quarter conference call. "Hopefully, we'll be shifting members from one of our books to another book, and we'd be indifferent to where they'd end up."
WellPoint's overall commercial membership is still on the rise, reaching 27 million as of the third quarter. But businesses of all sizes are rethinking how they purchase health benefits -- considering new carriers, self-funding and even direct contracting with primary care practices and providers.
Although some 8 million individuals enrolled in subsidized plans through state and federally-run exchanges this year, the small business "SHOP" marketplaces are really just getting off the ground, after a paper-only enrollment process and limited options last year.
In Washington State's public exchange, Washington Healthplanfinder, the only insurer, Kaiser Health Plan of the Northwest, sold small group options last year -- and only in two southern counties near the Oregon border.
For 2015, another insurer, Portland-based Moda Health, is selling small business exchange plans across Washington, while Kaiser stays in Clark and Cowlitz counties.
The public exchange is "a historical new option for small employers in Washington state," said Catherine Bailey, group insurance director at Washington Healthplanfinder. "Small businesses will also be able to enjoy the administrative ease that the marketplace provides."
In Washington State and elsewhere, the public exchange market for small group plans may not be huge. Only a dozen employers enrolled through Washington Healthplanfinder last year, and employers with fewer than 50 workers are exempt from the ACA's coverage mandate. Small businesses that want to offer insurance can also turn to trade associations for deals in states like Washington.
But the subsidies could be a big factor over the next few years. In 2016, employers with up to 100 full-time workers will be included in the small group category. Despite the early regulatory confusion and exchange technology problem, the federal government is expecting more and more small employers to consider using public exchanges.
The Department of Health and Human Services recently opened up federally-run small business exchanges for early enrollment in Delaware, Illinois, Missouri, New Jersey and Ohio. The "SHOP Early Access" program is allowing small business owners, employees and brokers to try out online pre-enrollment features and get a sense of their insurance options and costs.