The Obama administration plans to delay a piece of the federal health law designed to help small businesses shop for insurance policies, citing the need for additional time to prepare.

The Small Business Health Options Program, or SHOP, is supposed to provide small employers with an insurance marketplace, or exchange, that offers multiple plan options starting in 2014. But the Department of Health and Human Services has proposed that for the first year, businesses that use the 33 state exchanges run fully or in part by the U.S. will be able to offer only one plan to their workers, rather than pick from a range of options.

Washington officials said the 17 states running their own exchanges under the law could choose to enact a similar delay for 2014.

"For transitional purposes we have proposed that in 2014, a state may elect to have businesses choose one plan to offer employees, and in 2015 employees will be able to choose from the full range of plans in the marketplace," said Fabien Levy, an HHS official.

A proposed rule released in early March by the administration indicated that the government needed "additional time to prepare for an employee choice model and to increase the stability of the small group market."

The Republican-controlled House Small Business Committee last week issued a formal request for more information on what caused the delay, with a deadline of April 22 for a response. Committee spokesman Darrell Jordan said the delay "will lead to less competition, which could lead to higher premiums" for small businesses.

A major selling point of the 2010 Affordable Care Act was its pledge to help lower health-care costs for small businesses by letting them shop in exchanges that offered more plan choices. The broader pool of options theoretically would increase competition among insurers and attract more plan participants, thus resulting in lower insurance premiums.

Another popular aspect of the small-business exchanges is that they would make it easier for small employers, which typically lack human-resources departments, to manage plans. An employer could make a single payment to an exchange, which would disperse the money to the various insurance providers covering its staff, among other benefits.

The reason for the delay is likely that the government "underestimated a logistical challenge inherent in getting these exchanges up and running," said Bob Graboyes, senior fellow, health care, at the National Federation of Independent Business, a small-business lobbying group in Washington that opposes the law.

"The information-technology needs required to get these up and running are staggering," he said. "They didn't leave enough time and they underestimated the extent of the task."

News of the delay was earlier reported by the New York Times.

Rosina Rubin, co-owner of a chauffeured-transportation business in New York with $6 million in annual sales, said the delay comes as a "disappointment." Her firm covers roughly 75% of the cost of insurance plans for its 70 employees, down from 100% a few years ago, because the cost of her premiums kept rising.