The Vermont Health Connect website.
The Vermont Health Connect website.

MONTPELIER -- Vermont small businesses required to purchase employee health insurance through the state's exchange will have to enroll directly with insurance companies for another year, according to Lawrence Miller, the state's new chief of Health Care Reform.

Gov. Peter Shumlin originally announced the contingency last year as a stop-gap when the Vermont Health Connect website launched with serious deficiencies. The timeline for completing the small business component has been extended twice.

The federal government has given Vermont assurances that it can continue to rely on the carriers for the upcoming direct enrollment period, state officials have said.

The state and its primary vendor, technology firm CGI, will continue to develop the software to allow online purchases by small businesses, but won't attempt to deploy it until after the upcoming open enrollment period that begins Nov. 15, Miller said.

The state's focus for Vermont Health Connect has shifted to clearing two major hurdles in the individual market - allowing people to make changes to their coverage and renew their coverage. Both are functions the website cannot currently perform.

The state has not begun to look at contingencies if the online renewal function isn't ready, Miller said, but he echoed earlier comments by Mark Larson, commissioner of the Department of Vermont Health Access, that the website will be able to do renewals by open enrollment.

Following the missed deadline last week, state officials have not provided an estimate for when they will deploy the change of circumstance function, but have said they continue to make progress in testing it.

The state recently signed a $6 million contract with Minnesota-based health IT firm OptumInights Inc. to help work through the backlog of requests from users to make changes in their coverage.

"We have recognized in the past weeks that we are not able to do this on our own and we need external and significant assistance to bring down the backlog," Lindsey Tucker, the state's lead project manager for Vermont Health Connect told a legislative oversight committee Thursday.

There are more than 10,000 Vermonters who need to make a change in their coverage, according to Tucker's presentation to the committee. To make changes, people must call the Vermont Health Connect call center and the new information must be updated manually across several databases.

There are 29,300 people in the individual market paying premiums through Vermont Health Connect. That means more than a third need to make adjustments.

An additional 34,000 in the small group market will continue to work directly with the carriers, Blue Cross Blue Shield of Vermont and MVP Health Care.

The additional $6 million Vermont will shell out for the assistance of OptumInsights is roughly 4 percent of the total budget the state has to implement its exchange.

Vermont received a $171 million earmark to do that work, and has billed expenses against that earmark since the project began. The state has spent more than $50 million, but the most recent figures provided by the Department of Vermont Health Access are several months old.

Tucker's presentation to lawmakers didn't include information about what the project has cost, or how much the state expects to spend to complete its work.

DVHA could not provide updated spending figures Thursday.

The lion's share of the money has gone toward CGI's contract, which is worth $84 million. The state has imposed $5 million in penalties for missed deadlines, and could potentially impose $2 million more as part of a revised contract.

State officials would not discuss contractual issues about whether it will seek to impose the additional $2 million in penalties though CGI missed a deadline last week to deliver the change of circumstance function, and it does not appear likely the small business function will be ready by July 2 as specified in the contract.

Larson estimated in January that the dollar value of missed deadlines to that point was $26 million.