SHOP Marketplace 101
Choose a plan and sign up. That’s how easy it is to enroll in the new Small Business Health Options Program (SHOP) that opened its doors on October 1, 2013. Small-business employers can now purchase coverage through the SHOP marketplace for their employees with coverage beginning as soon as January 1, 2014. Initially available by phone, mail, and fax, the enrollment process will get even easier in November 2013 with the launch of the online application site. The marketplaces were set up as part of the Affordable Care Act to provide U.S. citizens with a forum to access and evaluate health insurance plans. For those who qualify, there are advantages to enrolling in the marketplace.
Note: On the week of September 30, 2013, a one-month delay in the ability for small businesses to enroll online in the federal exchange was announced. Small businesses will be required to mail or fax their information to enroll in the federal exchange during the month of October. Although the federal exchange still opened as scheduled on October 1, online enrollment will begin in November. Plans purchased through the exchange will still be effective for January 1, 2014 as planned.
One of the biggest advantages to the SHOP marketplace is its simplicity. As a small business, it’s essential to make the right choices for what’s best for your company and employees. Health care reform has left many employers with more questions than answers, and this new marketplace shouldn’t be another black hole.
With one application, you can compare prices, coverage, and quality of plans online. The marketplace will take the guesswork out of what premiums you’d pay and benefits protection you’d get before you enroll. Through simple and clear language, you can make better choices on what’s right for your business by comparing plans you’re eligible for side-by-side.
The marketplace will allow you to control what you can afford, the coverage you offer, and how much you pay toward employee premiums. In addition, you may also qualify for a small business health care tax credit, worth up to 50 percent of employer contributions to the premium costs. Starting in January 2014 and limited to two years, this tax credit will only be available for those plans purchased through the SHOP, which may influence your decision on whether you enroll, since the credit will lower the cost of providing health coverage.
The online application will guide you to the nearest SHOP in your state. Note that your office must be within the particular SHOP’s service area. Additionally, in the instance of federally run SHOPs, employees will only be offered one plan by their employer in 2014. Starting in 2015, employees will be able to choose from a range of plan options. State-run exchanges have the option for employers to offer more than one plan.
Small businesses with 50 or fewer full-time-equivalent (FTEs) employees (employees working at least 30 or more hours per week on average) are eligible to enroll in SHOP. You can’t enroll through SHOP if you are self-employed, but you can purchase coverage through the individual health insurance marketplace.
You must offer health insurance to all of your full-time employees, and in many states at least 70 percent of your full-time employees must enroll in your plan. It’s a good idea to talk to your employees ahead of time to see who might be interested in enrolling. Keep in mind that those employees with coverage through another employer plan, Medicare, Medicaid, the military, or veterans programs won’t be included in your calculation; however, those with individual non-group private coverage will be included. Even if you don’t meet the minimum participation rate, you can still apply for coverage during an annual enrollment period from November 15-December 15, 2013 to allow you to offer a SHOP plan.
The SHOP marketplace provides a streamlined path for qualified small businesses who want coverage they can control in order to best meet their needs. Before applying, you should review your current budget and create an employee list and target date to start coverage. You also should review your current plan and see how it compares to options offered in SHOP. Find answers and explore your options by visiting the SHOP Marketplace website.