Small Business Health Options Program

By: Taylor

What is SHOP?

The Small Business Health Options Program or SHOP is a new program that is aimed at simplifying the process of buying health insurance for small business. It will offer a large number of small businesses access to affordable health coverage options for their employees.

SHOP will give employers an opportunity to choose the level of support for their employees. Employees will be empowered to choose from available options of the specific health plan that is right for them and their families. All plans must have to offer a standardized set of benefits or essential benefits and cost-sharing. It will also give employers and employees an opportunity to make comparisons and choose the best plan.

The SHOP Marketplace gives small business control and choice on many features of health coverage. It will give them control over the coverage they offer and contribution toward employee premiums. They will be able to compare health plans online and apply for the best plan online too. They can also avail Small Business Health Tax Credit on meeting certain criteria. They can still deduct from their taxes the rest of the premium costs not covered by the tax credit. The SHOP starts in January and since then small businesses can buy health coverage through SHOP.

Control over the coverage

The small business can choose the level of coverage it will offer and the contribution it will make. Enrollment starts from October 1, 2013. Small businesses can also enrol after starting of Marketplace on January 1, 2014. They are free to decide employee premiums. There will be a SHOP Marketplace in each state. The small business must have an office or employee work site within the SHOPís service area to use that particular SHOP.

Health Coverage Rights

From 2014, insurance plans are prohibited from denying coverage based on the health status of employees or their dependants, even if they have pre-existing conditions. They are also prohibited from charging more on the basis of pre-existing condition or gender bias. Grandfathered plans are excluded from this rule.

Tax benefits

Small business could also access an expanded Small Business Healthcare Tax Credit. It covers up to 50% of the employer contribution toward premium costs for eligible employers having moderate-wage workers. Businesses having fewer than 25 full-time employees with average revenue of $50,000 a year or less are eligible for this tax credit. It will cover up to 35% for tax-exempt employers. This will bring down the cost of providing health coverage.

New consumer protections

New consumer protection rules have set new limits on the higher premiums insurers can charge businesses with older employees. Now they cannot increase groupís premium based on employee with high health care costs. There are also new limits on the share of premiums in insurersí profits and administrative costs.

The Employer Shared Responsibility payment has been made a new requirement under the health care law from 2015. It will apply on employers with more than 50 full-time employees lacking coverage or whose coverage doesnít meet certain minimum standards.

Compare Plans and Apply Online

The health insurance plans available in the SHOP will be private health insurance plans. They will all offer same essential benefits for sure. Plans will have to show their cost and coverage information in a standard format in easy language. It will be easy to compare plans based on price, coverage, quality and other features. With one online application small business can apply on their own with the help of an agent or broker.

Eligibility for the SHOP Marketplace

Starting in 2014, SHOP will offer health insurance option to employers with 50 or fewer full-time equivalent (FTE) employees. From 2016, it will be open to employers with up to 100 FTEs.
Self-employed persons cannot get coverage through shop. They will get coverage through individual market Health Insurance Marketplace.
Employers intending to buy coverage through SHOP must offer coverage to all their full time employees.
Many states offer purchase of coverage through SHOP on enrolment of at least 70% of full-time employees in SHOP plan.

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