Small Business Health Options Program (SHOP)
The Marketplace provides a health insurance marketplace for small businesses, those with 50 or fewer full-time equivalent employees. The Small Business Health Options Program (SHOP), even though offered through the various state Exchanges, is a different program from the individual Exchanges. To be eligible for the Small Business Health Insurance Credit, the insurance must be purchased through the SHOP.
Application Process
SHOP offers a single universal online application form. Business owners can, on their own, or with the help of an agent, broker, or other assister, compare price, coverage, and quality of plans in a way that's easy to understand.
Who Uses SHOP
Starting in 2016, an employer with at least 50 and fewer than 100 equivalent full-time employees must offer coverage to all full-time employees–generally those working 30 or more hours per week on average–or be subject to a penalty. For employers with fewer employees, coverage is not mandatory. Initially SHOP will not be available to employers who must offer coverage or be penalized. Employers eligible to use the SHOP marketplace generally will find more plans offered than if they don’t use SHOP, thus providing more plan options for their employees. Employers who qualify for the Small Business Health Insurance Credit based on the number of employees and average wage criteria, must purchase the insurance through the SHOP marketplace to be eligible for the credit.
Work Site
The employer must have an office or employee work site within the SHOP's service area to use that particular SHOP.
Coverage
The employer can select the desired coverage and how much the employer will contribute to the employee premiums, if any. Employees can then select higher or lower cost plans, but the employer’s cost will not change.
Self-Employed Individuals Without Employees
Self-employed individuals with no employees (independent contractors are not considered employees for this purpose), are considered self-employed, but not an employer and cannot acquire insurance through SHOP. They must instead use the individual Marketplace.
Self-Employed Individuals With Employees
Self-employed individuals who have employees (generally, workers whose income is reported on a W-2 at the end of the year) is considered an employer. In that case the self-employed individual can get coverage for himself or herself and the employees through the SHOP Marketplace.
Enrollment
In many states at least 70% of the employees offered coverage must enroll in order to buy insurance through the SHOP.
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Employees with coverage through another employer plan, Medicare, Medicaid, the military, or veterans' programs are not included in the calculation.
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Employees with individual non-group private coverage are included in the calculation.
Example – An employer has 14 full-time employees, and of them two have coverage through a spouse's employer, one is covered by Medicare and one is covered by TRICARE(1). Thus 10 employees count toward the 70% requirement and at least 7 of the 10 employees must enroll. (1)TRICARE® is the health care program serving Uniformed Service members, retirees and their families worldwide.
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Employees Are Not Eligible for Premium Tax Credit
Employees covered under an employer plan are not eligible for the premium assistance subsidy/credit even though they would otherwise be qualified. This is one of the catch-22 provisions of the premium assistance subsidy/credit. Thus, where an employer provides a plan but does not supplement the employee’s cost, the employee is stuck with the cost of the employer plan even though his out-ofpocket insurance premiums may be substantially less through the individual Exchange if he qualified for the premium assistance subsidy/credit.
For more information go to these websites:
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California: https://www.healthcare.gov/marketplace/shop/#state=california