The Affordable Care Act and Small Businesses

Today, small employers like you have a tough time finding and affording coverage that meets the needs of your employees.

In 2014, the Small Business Health Options Program (SHOP) Marketplace opened to employers with 50 or fewer full-time-equivalent employees (FTEs). You may qualify for tax credits if you use SHOP. Beginning in 2016, all SHOPs will be open to employers with up to 100 FTEs.

The advantage of SHOP is that you will have more choices and control over your health insurance spending through SHOP, designed to simplify the process of finding health insurance for your small business. Here’s an overview of the key points to be aware of:

You control the coverage you offer
You choose the level of coverage you’ll offer, and define how much you’ll contribute towards your employees’ coverage.

Access to tax benefits
You’ll also have access to an expanded Small Business Healthcare Tax Credit. This tax credit covers as much as 50% of the employer contribution toward premium costs for eligible employers who have low- to moderate-wage earners.

When you get insurance through the SHOP, it makes it easy for you take advantage of other tax breaks too including the chance for you and your employees to use pre-tax dollars to make your premium payments.

New consumer protections
You and your employees may also benefit from new protections that help you get real value for your premium dollars. There are new limits on the higher premiums insurers can charge businesses with older employees, and an employee with high health care costs no longer increases your group’s premium. There are also new limits on the share of premiums going to insurers’ profits and administrative costs.

Insurance plans run by private companies
The health insurance plans available in the SHOP will be run by private health insurance companies, the same way small group plans are run now. All plans will offer the same benefits as a “typical” employer plan, including protection against financial catastrophe.

Plans will present their cost and coverage information in a standard format, using plain language that’s clear and easy for you to understand. You and your employees will be able to easily compare plans based on price, coverage, quality and other features that are important to you.

Use your broker, or shop on your own
You can use your existing insurance broker to access the SHOP, or you can shop for plans yourself, without a broker. You can review pricing and coverage in apples-to-apples comparisons, complete a single application, and choose the level of coverage that works for your budget, your business, and your employees