Small business owners can offer health insurance through SHOP

First published in Landings, June, 2016.

Alisha Keezer is the MLA’s health insurance Navigator.

Alisha Keezer is the MLA’s health insurance Navigator.

To make it easier for small business owners and their workers to get affordable health coverage, the Affordable Care Act (ACA) established the Small Business Health Options Program (SHOP) marketplace in every state. SHOP offers small businesses a simple way to find and buy health insurance coverage that meets the needs of employees and a company’s budget. Employees are often the greatest investment for a small business owner. Health insurance may be essential to keep and recruit employees, maintain productivity, and improve employee satisfaction.

The SHOP marketplace offers small companies (1-50 employees) a choice of health and dental insurance plans provided by private insurance companies. Small employers who offer coverage through the SHOP marketplace might be eligible for the Small Business Health Care Tax Credit which could be worth up to 50% of their contributions to employees’ premiums.

Before the ACA, small businesses faced many obstacles when it came to covering workers: higher premiums, unpredictable rate increases, few insurance choices, waiting periods, and higher rates for companies with women and older workers. Under the ACA, insurance companies now must show proposed rate hikes, can’t charge higher rates because of pre-existing conditions, can’t charge higher rates for women or older workers, and cannot have annual dollar limits on coverage. The ACA has helped end obstacles to coverage so that even small employers can offer access to affordable health insurance.

Through the SHOP marketplace, the owner of a small business has more choice and control over health spending. He or she can choose the coverage offered and how much to contribute toward employees’ premiums. The federal government’s online portal allows for flexibility when selecting plans, managing employee participation, and even paying premiums online. SHOP enrollment is open throughout the year so small business owners can enroll in plans when they wish; employees can easily enroll online.

Like the individual plans available through the marketplace, SHOP plans must offer the same set of essential health benefits. These benefits are prescriptions, doctor visits, pregnancy services, hospitalization, and more. SHOP also lists health insurance plans in three plan categories: Bronze, Silver, and Gold.

SHOP allows employers to decide how they want to offer health insurance plans. They can offer employees a single health or dental plan or a choice of plans within a plan category (Bronze, Silver, or Gold) so that employees can choose any plan within the selected coverage category. The benefit of offering employees a choice of plans is that they can choose plans that best fit their needs. Employers can limit those choices, however, to control their health insurance costs. They will still pay just one monthly bill even if offering multiple plans from different health insurance companies.

There are many benefits to using SHOP to provide affordable health insurance coverage to your employees. Not only does offering health insurance help to keep employees, it can also be an incentive to attract employees. Using SHOP may also be a good financial decision for businesses with less than 25 employees that qualify for tax credits. Small business owners may apply for SHOP coverage through an online application location at healthcare.gov. The online site allows an owner to compare plans side by side, choose a plan, manage employee participation, and pay for premiums online.

To determine if your business is eligible, the business must:

  • Have at least one employee who is enrolling in coverage;
  • Employ 50 or fewer individuals; and
  • Have a principal business address within the state where you’re buying coverage.

Tips to help you with your SHOP marketplace enrollment:

  • Decide on your budget. Think about what you are able to spend on health insurance and decide how much you want to contribute towards your employees’ premium costs. Additionally, consider how much your employees can afford to spend on their coverage.
  • Decide who you’ll cover. You must cover your employees but offering dependents coverage is optional.
  • Learn what your employees’ health insurance needs are. Ask your employees about their health.
  • Decide if you want to offer a choice of plans or one single plan.
  • Review the available plans in your area. This can be done by going to healthcare.gov/see-plans/small-business/

If you need assistance, contact me to help you through the process. Call 207-967-4555 or email alisha@mainelobstermen.org.