Smaller employers aren’t required to offer insurance under the federal Affordable Care Act, but they do get something from Obamacare: The Small Business Health Options Program, known as SHOP.
The idea is to make it easier for small employers to continue or to begin offering group insurance for their employees. The SHOP marketplace will open Oct. 1 for employers with 50 or fewer full-time employees. SHOP is designed to let small business owners control how much coverage they offer and how much they pay toward employee premiums.
“The SHOP will still provide employers with a streamlined comparison of health plans from multiple health insurance issuers, assistance modeling employee contributions, and real-time premium quotes,” the federal Health and Human Services Department says, adding that all plans sold on SHOP must meet the law’s minimum standards.
According to the federal Centers for Medicare and Medicaid Services, this is how SHOP will work:
» A business may receive a health care tax credit up to 50 percent of the premiums it pays. (The cutoff becomes 100 employees in 2016.) The business can still count the rest of the premiums paid as a business expense deductible from taxable income.
» Some businesses already receive a health insurance tax credit. Starting in 2014, that tax credit is available only through the SHOP. A person who is self-employed with no employees can use the marketplace for individual insurance but not the SHOP.
» Business can shop for SHOP coverage on state marketplaces starting Oct. 1 for coverage beginning on Jan. 1, 2014, or can enroll later to begin coverage after Jan. 1. A business must have an office or work site within the state where each SHOP operates.
» A company can compare health plans, choose one under the SHOP and offer it to all full-time employees, usually those working 30 or more hours a week. Employees then decide if they want to enroll in the plan. A certain percentage of employees must enroll for the business to take part in a SHOP plan, usually 70 percent of workers.
» Business owners can use a licensed agent or broker to handle the SHOP business and won’t pay more, the CMS said.
» Employees can agree to enroll or not, but if they do not enroll in an offered SHOP plan they won’t qualify for tax credits that would reduce their monthly premiums.
» SHOP plans have similar coverages as individual health plans, as well as four “metallic” categories for the share of claims paid by the insurance company: bronze, 60 percent; silver, 70 percent; gold, 80 percent; and platinum, 90 percent. The CMS said plans offer varying out-of-pocket costs, such as co-payments and deductibles. — World-Herald archive