K
  • Insurance

    By Leon Grove, DBA, Full-Time Faculty, Kaplan University
    Published February 2015

    What is the acronym SHOP?

    The Small Business Health Options Program (SHOP) is a Marketplace designed to help small businesses provide health coverage to their employees. SHOP is part of the Affordable Care Act and this year is the first time for implementation; previous attempts have failed. The SHOP Marketplace is similar to the health insurance marketplace for individual health insurance enrollment. SHOP is open to employers with 50 or fewer full-time equivalent employees (FTEs), including non-profit organizations. 

    What are the benefits of SHOP?

    The SHOP Marketplace allows the business owner to offer high-quality health and dental coverage that meets the needs of their employees. SHOP offers flexibility, choice, and the convenience of online application and account management. For 2015 coverage and beyond, employers can apply for SHOP, choose a plan or plans, complete coverage offering, manage employee participation, and pay premiums online. Employees can also enroll online. Employers can:

    • Control the coverage offered and how much to pay toward employee premiums
    • Choose whether to offer dependent coverage (some states require it) and dental insurance
    • Choose how long employees’ open enrollment period is and the waiting period before new employees can enroll. 

    Employers have the option to use their current agent or broker to help with enrollment, find a new agent or broker in their area familiar with SHOP plans, or handle enrollment independently. When employers apply, they can search for agents and brokers registered to sell SHOP plans by zip code. Employers can enroll in SHOP any month, any time of year. There’s no restricted enrollment period when employers can start offering a SHOP plan; in addition, there is no limited enrollment period for small businesses to enroll in SHOP coverage for their employees. Employers may apply via www.healthcare.gov and then click on Small Businesses.

    What Are the Health Plan Options?

    In all states, employers can offer one health plan to employees. In some states, employers can choose a coverage category, like Bronze or Silver, and let employees choose any plan in that category. The Bronze, Silver, Gold, and Platinum are considered categories of coverage and can help both employer and employee determine the category of benefit and the cost associated with each category. For instance, the Bronze level may provide 40% of the cost to the employer and 60% of the cost to the employee. 

    Small Business Health Care Tax Credit

    If you enroll in SHOP coverage and have fewer than 25 employees, you may qualify for a Small Business Health Care Tax Credit worth up to 50% of your premium costs. The tax credit is available only for plans bought through the SHOP Marketplace. The tax credit for Small Business Health Care can be worth up to 35% of employer-paid premium costs, and has provided more than $1 billion in tax credits. The tax for credit is available for 2 years after initial enrollment.
    Finally, the additional benefit to the small business employer includes the ability to attract and to retain a quality workforce within the organization by providing benefits for workers and their families.

     

    Reference

    U.S. Department of Health & Human Services, on the Internet at www.hhs.gov


    Leon Grove is a full-time faculty member at Kaplan University. The views expressed in this article are solely those of the author and do not represent the view of Kaplan University.

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