December 10, 2013 3 min read

In one of the biggest blows to health insurance for small businesses in the country, the largest provider of small-group and individual coverage in New Jersey says it will not renew any 2013 policies for its current members, citing changes in the implementation of Obamacare.

Horizon Blue Cross Blue Shield of New Jersey covers roughly 500,000 people in individual and small-group plans, all primary plans for small businesses. Now those members will have to seek different coverage, almost certainly with a higher price point. Larger plans were not affected by the move.

Last month, President Obama reversed himself, allowing policies that didn't meet certain thresholds of coverage under the Affordable Care Act to be renewed. That decision came after millions of Americans were told they could not have their current insurance renewed or would have to pay sharply higher premiums.

Related: Latest Obamacare Delay Means Small Businesses Will Have to Wait. Again.

While, in theory, insurers had the option of renewing non-compliant plans, the change came too late for Horizon, the company said.

"Horizon BCBSNJ has been working to implement the Affordable Care Act for the past three and a half years, and undoing our work and essentially creating new plans in three weeks has proven to be impossible," Thomas Rubino, Horizon's director of public affairs, said in a statement to NJBiz.

"Horizon BCBSNJ conducted an in-depth analysis of the feasibility and impact of renewing 2013 policies,” he said. “Since the federal government is requiring all 2013 policies to be modified upon renewal, our members' current plans would be significantly different and far more expensive, especially for the most popular Basic and Essential plans."

Related: Why More People Are Losing Health Coverage Than Enrolling in It

The company said it was communicating options to its current members, notably how to convert their existing plans into those that are compliant with Obamacare provisions.

The decision by Horizon, based in Newark, N.J., is another blow to the rollout of Obamacare, which has also been plagued by technological problems as potential members tried to register online. The government claims most of its website problems were fixed by the beginning of December, though enrollment is reportedly well off where the government hoped it would be.

Horizon's move is especially hard on small businesses, which often are insured through individual or small-group plans. According to the Small Business Administration, smaller companies in the state account for 98.4 percent of all employers and 50.2 percent of the labor force. There are 358,000 people in the state who identify themselves as self-employed.

Related: 3 Website-Building Lessons From the HealthCare.gov Debacle