The Small Business Health Option Program, or SHOP, is a health insurance program under the Affordable Care Act (ACA), wherein employers with 50 or fewer full-time equivalent employees can compare health plans online. Eligible employers enroll, beginning October 1, 2013, for coverage on or after January 1, 2014. With SHOP, employers decide what they’ll pay toward employee premiums, and then employees can enroll in a plan that fits their needs.
Tax Credits
Businesses with fewer than 25 full-time equivalent employees making an average of $50,000 or less annually may qualify for health care tax credits. Qualifying businesses must pay at least 50% of premium costs for full-time employees. Beginning in 2014, the credit is up to 50 percent of an employer’s contribution toward its employees’ premium costs, and 35 percent for tax-exempt employers.
The tax credit is only available when coverage is purchased through the SHOP program, and could result in substantial savings for employers.
Determining Eligibility for Your Business
So, how do you know whether your business qualifies? Eligibility is fairly straightforward—employers with 50 or fewer full-time-equivalent employees are eligible to enroll in the SHOP Marketplace. If you already offer your employees health insurance, it’s possible that your insurance company plans to offer coverage through SHOP. If you determine that your insurance company does not plan to offer coverage through SHOP, consult your agent or broker, or go directly to the SHOP website to review your options.
Additional Benefits under the ACA
Under the Affordable Care Act, insurance companies can’t turn employers down for group coverage based on the health status of its employees or their dependents, nor can insurers charge higher premiums for women or increase a group’s premium because of higher medical costs of some employees.
The objective of the SHOP program and the tax credits is to make it easier for employers to offer insurance to employees, reducing the number of uninsured in the country.
Benefit Packages has been helping California businesses find affordable group health coverage for decades with reputable companies like Anthem Blue Cross and Blue Shield. We will be in a unique position as a SHOP certified agency and can help your understand your best options for coverage. Call us toll free at 1-800-356-3615 or visit our website for more information.