IBJ: What is SHOP?
Bloch: The SHOP is an acronym for Small Business Health Options Program and it’s part of the Affordable Care Act. It’s an on-line marketplace specifically for small businesses. Under the Affordable Care Act, employers with 50 or more full-time or full-time equivalent, permanent employees are required to provide coverage or face penalties. But SHOP is for smaller businesses that don’t meet that threshold and are subject to that requirement.
IBJ: If an employer does not currently offer health insurance and is not required to do so by the law, why would they do it now?
Bloch: Employers can get tax credits through SHOP for offering health insurance to their employees. Generally speaking, the smaller they are and the less they pay, the higher the tax credit. For example, a company with fewer than 25 full time equivalent employees and pays an average salary of less than $50,000 can qualify for a 50 percent tax credit on their premiums. The employer has to pay 50 percent of the full time employee’s premium cost and it’s only available through the SHOP marketplace. The tax credit is highest for companies with fewer than 10 employees who are paid an average of $25,000 or less. The smaller the business, the bigger the credit.
IBJ: When did SHOP open for business?
Bloch: The SHOP marketplace opened for business on Nov. 15 and offers coverage starting Jan. 1, 2015, but there’s no deadline. You can enroll your company anytime. But, you need to keep in mind that you have to give your employees at least one week to decide whether to accept your coverage offer and you have to enroll by the 15th day of the month for coverage to start the first day of the next month.
IBJ: How many health insurance plans are offered through SHOP?
Bloch: There are four basic types or levels of plans: Bronze, Silver, Gold and Platinum. Generally speaking, the bronze plans are the cheapest and provide the least coverage and the platinum ones are the most expensive and offer the strongest coverage. How many insurers offer plans varies from state to state and county to county. Blue Cross/Blue Shield and Land of Lincoln Health both offer a variety of plans within those categories in the Metro East.
IBJ: Is it possible to simply offer your employees a choice of plans and let them choose what they want?
Bloch: It is in Missouri but not in Illinois. Illinois employers will need to select a particular plan and it’s up to the employees to opt in or out. The employer controls the coverage that’s offered and how much they pay toward employee premiums. The employer decides whether to offer dependent coverage or dental insurance, etc. And, the employer decides how long the employees’ enrollment period is and how long employees have to wait before they can enroll.
IBJ: Can you use an insurance broker or do you have to navigate this yourself?
Bloch: You can use your current agent or broker to help you enroll, find a new agent or broker in your area familiar with SHOP plans, or handle your enrollment yourself. When you apply, you can search for agents and brokers registered to sell SHOP plans by ZIP code.
IBJ: Do all of your employees have to enroll in the plan?
Bloch: Not all of them but in most states — including Illinois — at least 70 percent of the employees you offer coverage to must enroll in order for you to buy insurance through the SHOP Marketplace. Employees who have other coverage like Medicare, Medicaid, the military, etc. are not included in the calculation. But, if you can’t meet this minimum participation rate you can still use SHOP if you apply for coverage between Nov. 15 and Dec. 15 each year.
IBJ: In Southwestern Illinois it’s fairly common for businesses to have operations and employees on both sides of the river. What do you do if your business has employees in more than one state?
Bloch: You have a couple of options. You can choose a single health plan with a multi-state or national provider network and offer it in all of your business operation locations. If you choose this option, all employees in all work locations will be counted when calculating your minimum participation rate. You should create your SHOP Marketplace account in the state where your primary business site is located.
The other option is to create a SHOP Marketplace account in each state where your employees have a primary worksite. As long as your business meets all criteria to participate in SHOP, you can create a SHOP account even if you have just one employee in a location.