The SHOP Marketplace: An Overview
June 20, 2014 at 2:14 PM
The passage and implementation of the Affordable Care Act (ACA) provided many advancements in the access to affordable healthcare for not only individual Americans, but also small businesses. This article looks at some of the advantages the ACA introduced to small employers; the eligibility for potential tax credits and requirements for using the Small Business Health Options Program (SHOP); and the role of agents and brokers in the process.
Just as with the individual Marketplace, the SHOP Marketplace requires that all available policies be qualified health plans (QHPs), do not have a pre-existing condition exclusion, cover the 10 essential health benefits (EHBs), are limited on how premium rates may vary between employees, acknowledge identified qualifying events (QEs) which trigger special enrollment periods (SEPs), and participation in available wellness programs may reduce some employees' premiums.
In addition to the enhancements to coverage for their employees, small businesses also enjoy the possibility of tax credits for premiums paid, choosing the percentage of contribution toward their employees’ premiums, the ability to include employee spouses and dependents, plan comparison tools of available policies, and less uncertainty about annual premium cost increases at plan renewal.
For 2014, small businesses with 50 or fewer full-time equivalent (FTE) employees that offer coverage to all full-time employees are eligible to utilize SHOP. Additionally, those with 25 or fewer employees, have average employee wages below $50,000, and contribute at least 50% of the cost of single health care coverage for each participating employee are eligible for a tax credit. Healthcare.gov has created two tools to aid in this process: an FTE calculator and a tax credit estimator.
Although an ACA Navigator may assist small businesses with education about eligibility for enrolling in a SHOP plan, estimating possible tax credits, and comparing available plans; moving forward to the enrollment phase requires either an agent/broker that handles SHOP policies or direct enrollment with the desired insurance company. The benefit of using an agent/broker is that they are able to assist small employers with the applications for both the tax credit and SHOP plan enrollment. As the plan year advances, an agent/broker is also able to assist with new hires, employees that experience QEs, and annual plan renewals or changes.
The ACA legislation widened the health insurance playing field to include more consumers looking to obtain affordable medical services: for both individuals and small businesses. Through the tools and benefits offered by SHOP, small employers now have access to more information and resources with which to make informed decisions about providing health insurance coverage to their employees than has previously been available.