Health Insurance Options for Small Businesses: Small Business Health Options Program (SHOP) Plans
While Venteur is a pro-ICHRA company, we also believe that employers should understand their options. Small Business Health Options Program (SHOP) plans are a familiar option for many businesses offering health insurance to their employees.
When thinking about health insurance for your employees, one of the options that might come to mind is the Small Business Health Options Program (SHOP). Created under the Affordable Care Act (ACA), SHOP plans were designed with small businesses in mind, allowing them to provide health and dental coverage to their employees.
The **primary benefit** of SHOP plans is the **tax credits**. Eligible small businesses can get a tax credit worth up to 50% of their contribution towards employees' premium costs (up to 35% for tax-exempt employers). This makes it financially attractive for businesses with fewer resources.
A Few Considerations
Like any health insurance option, there are some considerations to bear in mind:
1. Minimum Participation Requirements: For most states, at least 70% of youremployees must enroll in your SHOP plan unless they have coverage from another source.
2. Limited Choices: With SHOP, employers can offer one or two plans to their employees, but they must be adjacent metal tiers. For instance, you can't pair a Bronze and Platinum plan.
3. Seasonal Workers:They can be counted in the total number of employees, which might influence the size of your business in the eyes of the SHOP marketplace.
How to Access SHOP Plans
Small businesses can access SHOP plans in several ways:
1. Healthcare.gov: Through the official HealthCare.gov website or your state's official health insurance marketplace.
2. Brokers: Many health insurance brokers are equipped to provide small businesses with guidance on picking the right SHOP plan.
3. Payroll Providers: Companies like Gusto often offer SHOP plans. If you've obtained a health plan via Gusto, it's likely a SHOP plan.
In Conclusion
SHOP plans present a valuable option for small businesses looking to extend health benefits to their team, especially with the potential tax credits making them a noteworthy consideration. However, businesses should also weigh the benefits of the Individual Coverage Health Reimbursement Arrangement (ICHRA) against their specific needs. When looking for greater flexibility and personalized health coverage options, ICHRA might be the better route. Regardless of the choice, it's crucial for businesses to assess their unique circumstances, consult with experts, and be mindful of the outlined considerations before deciding.
