(By: Brittany Brooks)
Being a small business owner can be tough when you want to offer your employees health insurance. There’s a lot to think about and for good reason, you want to give your employees access to healthcare and make the right decision for your company.
You may question if you can afford it, if there’s a plan to fit your particular situation, and is there anything to assist you in this endeavor.
And yes! Somewhere out there, there is a plan to fit your company’s budget and circumstances, there’s also someone to help you through the process. Before we tell you who the someone is, let’s go over the program set in place to help small businesses specifically.
This program is called SHOP for short.
What is SHOP?
SHOP is the Small Business Health Options Program. SHOP was established for small business owners to provide health insurance to their employees that’s more flexible and affordable than traditional health insurance.
At least one employee that is not yourself, spouse, or family member must be employed to qualify. If you have under 50 full-time employees you may qualify for the small business health options program.
|Nice To Know:||Your company can enroll in SHOP all year round.|
You may be eligible for the Small Business Health Care tax credit if you have less than 25 employees and the employees make less than $50,000 a year. (Only qualifies for plans purchased through the SHOP marketplace.)
The best part about SHOP is the flexibility and the convenience it offers small businesses. You can offer one plan to all your employees or employees can choose from a few different plans. At the same time, you can decide when new hires are eligible for health insurance and how much you pay toward the employee’s premium.
There’s also the option to extend health coverage to your employees’ dependents. With SHOP, none of your employees can be excluded from the policy because of pre-existing health conditions, so more employees have access to health benefits.
It seems like a lot to digest and shopping for small business health insurance has its own set of challenges. You have the option to purchase healthcare plans from the SHOP marketplace through your current insurance carrier or through a SHOP registered broker. Either your insurance carrier or SHOP registered broker will help you navigate the complicated process from beginning to end.
However, there are benefits to using a SHOP registered broker.
What is a SHOP registered broker?
Like insurance brokers, SHOP registered brokers are licensed professionals who work with multiple insurance carriers to find what’s best for your company. The major difference, SHOP registered brokers have gone through hours of training to get certified to operate within the SHOP marketplace.
Registered brokers help you determine your eligibility status and apply for the Small Business Health Options Program. They understand the details of certain tax credits you may be eligible for, like the Small Business Health Care tax credit.
You typically won’t pay extra for their service, but you still get access to the benefits of using a SHOP registered broker. You don’t have to research and compare a variety of plans because the registered broker does it for you.
The registered broker goes over each plan’s specific feature and goes over the options available to you.
|Offer one plan or a selection of plans to employees
Determine when new hires are eligible for health benefits
How much do you want to pay towards your employees’ premiums
The choice to extend benefits to employees’ dependents
After you enroll, your SHOP registered broker continues to manage the plan and keep it up to date with any changes or renewals. They even do a little extra by helping your employees understand their health benefits and answering any questions they may have.
You can choose to use your current insurance carrier, but you’ll only be able to view the health insurance policies that specific carrier offers. A bigger variety of plans are available to you by using a SHOP registered broker and you might increase your chances of finding the right one for your company.
A SHOP registered broker will help you determine if you’re eligible or not, but there are a few requirements for the Small Business Health Options Program in general. You have to meet these 4 requirements in order to apply for the program:
- Employ between 1-50 Full-Time Equivalent employees (FTEs)
You have to employ at least one employee that’s not your spouse, family member, business partner, or yourself. Some states may allow businesses with up to 100 employees to apply, but you’ll need to contact your State Department of Insurance to find out more.
If you have more than 50 employees and feel like you need the benefits of SHOP, you can reach out to the SHOP call center (1-800-706-7893) for details.
- You must offer coverage to all full-time employees
You have to offer coverage to employees working 30 hours or more and you have the option to extend the benefits to part-time employees if you’d like to.
- Must have an employee participation rate of at least 70%
The participation rate varies by state. You can check here to see what the rate is for your particular state, but most states have a 70% participation rate. If any employees receive medical insurance outside of SHOP it does not count towards the total participation rate.
This requirement isn’t enforced between November 15th- December 15th of every year. You have the option to enroll during this time without meeting the participation rate.
- The employee office or worksite has to be within the same state you’re applying for SHOP benefits
You can only apply for SHOP within the same state as your office or employee worksite. If you have employees in multiple states, you can still purchase healthcare plans through the SHOP marketplace. Click here to find out how!
A SHOP registered broker is a great tool for small businesses trying to offer employee benefits without breaking the bank. You don’t have to be a Fortune 500 company to have access to health insurance resources and affordable benefits.