As most know, January 1, 2014, marked the launch of many key Affordable Care Act (ACA) provisions. Two big ones: the opening of the Health Insurance Marketplace and rating changes.
Under the new community-rating rules, small-group health plans are no longer subject to medical underwriting, and premium rates can only vary based on age, tobacco use, and geographic location.
To avoid drastic premium increases, most small employers with fewer than 50 full-time equivalent employees took advantage of the opportunity to renew coverage before the new 2014 rating rules.
One change employers may not be aware of is a program launched January 1 called the Small Business Health Options Program (SHOP). This program allows small employers to choose a specific plan, which can then be eligible for the Small Business Tax Credit. The credit could be as much as 50% of what the employer contributes to employees’ premiums.
SHOP was created to encourage small employers to offer affordable health insurance to their employees. For employers who qualify, tax credits are available to offset the cost of coverage.
A few things to note about SHOP eligibility:
- Must employ 50 or fewer full-time equivalent (FTE) employees
- Renew any time off anniversary, even if you took the December offering
- Tax-exempt organizations are eligible as well
- No longer required to fill out health statement forms
- Minimum 75% participation with valid waivers
Tax Credit Eligibility
- Employ 25 or fewer full-time equivalent (FTE) employees
- Employees must make an average of less than $50,000 per year
- Employer must contribute a minimum of 50% toward employee premium (spouses and dependents exempt)
- Employer can receive up to 50% in tax credits towards the premium contributed to their employees
- MUST have a SHOP plan to be eligible
To find out if a SHOP plan could benefit your business, contact Bukaty Companies, 913-345-0440 or bukatycompanies@bukaty.com.
