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What's the SHOP?

SHOP stands for "Small Business Health Options Program."  It is intended to be part of the health exchanges opening next year at an internet URL near you (either your state or the federally-facilitated exchange ("FFE")).  The SHOP is meant for employers with less than 100 employees, though states will be able to restrict that number to less than 50 until 2017.  Each SHOP must allow employers to the option to offer employees all qualified health plans at a level of coverage chosen by the employer--bronze, silver, gold, or platinum.  A recent rule release has indicated that these SHOPs would allow an employer to offer only one option to its employees.  

Why would an employer use the SHOP if they were only going to offer one option?  That sounds a lot like what they do right now.  True.  However, the SHOP will be the only place an employer can obtain the Small Business Tax Credit available right now to employers with less than 25 employees and average wages less than $50,000.  The tax credit offers 35% of the employer premium cost to offset the cost of health insurance.    

 

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