SHOP: WHAT IS IT?
So, what is SHOP?
The Small Business Health Options Plan (SHOP) is a program designed for small business owners to provide their full-time employees with healthcare. Just to be clear, a small business under Covered California is considered 50 or fewer employees who are full-time (this changes to 100 or fewer in 2016). Self-employment does not qualify you for SHOP, which means you will have to use the individual marketplace.
Through this program, you’ll be able to select a plan that is right for you, your business, and your employees. It allows you to choose how much you would like to pay toward your employees’ premiums, as well as the possibility for a tax credit of up to 50% off your premium costs.
This tax credit is only available through SHOP.
In order to enroll your business it must be within a SHOP service area, which the online application will help you find. If you use SHOP, you must offer coverage to all your full-time employees with 70% of them actually using the plan.
All in all, this is not a bad way to go if you have a business but haven’t been able to offer healthcare to your employees. If your current broker hasn’t contacted you to discuss your options and upcoming changes to your Individual or Group business, we at J.S. Tucker Insurance would be happy to have that conversation with you today.
Below is an article from healthcare.gov on SHOP.
What is the SHOP Marketplace?
The Small Business Health Options Program (SHOP) is a new program that simplifies the process of buying health insurance for your small business.
For 2014, the SHOP Marketplace is open to employers with 50 or fewer full-time-eqivalent employees (FTEs). The advantages of using SHOP include:
You control the coverage you offer and how much you pay toward employee premiums.
You can compare health plans online on an apples-to-apples basis, which helps you make a decision that’s right for your business.
You may qualify for a small business health care tax credit worth up to 50% of your premium costs. You can still deduct from your taxes the rest of your premium costs not covered by the tax credit. Beginning 2014 the tax credit is available only for plans purchased through SHOP.
Compare plans and apply online
The Small Business Health Options Program (SHOP) is designed for small employers with 50 or fewer full-time equivalent employees. With one online application, on your own or with the help of an agent, broker, or other assister, you can compare price, coverage, and quality of plans in a way that’s easy to understand.
Health coverage through SHOP starts as soon as January 1, 2014. You can enroll now and begin coverage any time after January 1, 2014.
You decide what you’ll pay toward employee premiums, and then your employees can enroll.
There will be a SHOP Marketplace in each state. You must have an office or employee work site within the SHOP’s service area to use that particular SHOP. The online application will guide you to the right SHOP for you.
How to know if you qualify for the SHOP Marketplace:
In 2014, SHOP is open to employers with 50 or fewer full-time equivalent (FTE) employees. Beginning in 2016, all SHOPs will be open to employers with up to 100 FTEs: If you’re self-employed with no employees, you can get coverage through the individual market Health Insurance Marketplace, but not through SHOP.
If you plan to use SHOP, you must offer coverage to all of your full-time employees–generally those working 30 or more hours per week on average.
In many states, at least 70% of your full-time employees must enroll in your SHOP plan.