Small Business Health Options Program
What is the Small Business Health Options Program (SHOP)?
The Small Business Health Options Program (SHOP) is a program set up within health insurance exchanges where employees of small businesses (with 50 or fewer full time employees) can find health insurance plans. If you’re self-employed, you cannot get coverage through SHOP but will have to apply for coverage through the individual health insurance market.
How does the Program Work?
The Small Business Health Options Program works as follows:
- A small business owner will register and define the employer contribution towards the cost of health insurance.
- An employee can then use the SHOP to compare plans and see what costs would be after the employer contribution is made.
- The SHOP will send the employer a monthly bill for employer and employees.
- The employees will pay through payroll deduction.
- The employer will pay the SHOP who will pass the payment to the insurer.
Tax Credits Through SHOP
Certain business can qualify for tax credits through the Small Business Health Options Program. In order to qualify, a business must:
- Have less than 25 full-time employees
- Average income of employees must be less than $50,000
- Coverage must be purchased through the Small Business Health Options Program
50% of your contribution towards employee premium counts towards the tax credits offered by the program (with a 35% maximum for tax-exempt employers).
Enrolling in the Program
The Small Business Health Options Program was originally to launch on October 2013. However, technical issues with the health insurance exchanges delayed the launch of the program, and small business will not be able to enroll in the Program until November 2014.