The last health insurer selling small business coverage through MNsure won't return to the state's health insurance exchange next year, and will instead transition customers to the market where small businesses buy directly from health plans.

The decision announced Monday by Eagan-based Blue Cross and Blue Shield of Minnesota is another blow to MNsure's small business program, which never really got off the ground after being launched for 2014.

Blue Cross became the only carrier selling small business coverage through MNsure in 2016 after Minnetonka-based Medica dropped out of what's called SHOP — the Small Business Health Options Program, which was launched in all states under the federal Affordable Care Act (ACA).

The move announced Monday does not affect the much larger MNsure exchange for individuals, where Blue Cross has filed to compete again next year.

"After four years of participation, small group enrollment through the exchange continues to represent a very low percentage of Blue Cross' overall small group membership," the insurer said in a statement. "The combination of low enrollment and high administrative costs to participate in the small group health insurance exchange marketplace led to this decision."

SHOP has been an option for small business with two to 50 employees, but as of July only 3,287 people in Minnesota were getting coverage through the program.

When the state decided to launch MNsure, officials projected 155,000 people in small group plans would be covered through the program by 2016.

It's been a similar story nationally, with new government run insurance exchanges struggling to attract small business customers.

The Commerce Department confirmed Monday that no other insurers have filed for 2018 to sell coverage in Minnesota through the SHOP exchange.

The ACA offers tax credits to small businesses that buy coverage through an exchange like MNsure.

"[Blue Cross] has pledged to work with MNsure and federal partners to maintain the tax credits," said Allison O'Toole, the MNsure chief executive, in a statement. "Their decision does not impact the almost 130,000 Minnesotans ... enrolled through MNsure on an individual basis."

People covered through MNsure small business policies will see no immediate impact, O'Toole said. A spokesman said MNsure is not currently planning to close the SHOP exchange.

Christopher Snowbeck • 612-673-4744