SHOP assists businesses in offering health coverage to their employees.
If you happen to have less than 25 employees, you may be eligible for the Small Business Health Care Tax Credit when purchasing SHOP insurance, which is typically accessible to employers with 1-50 full-time equivalent employees (FTEs).
Individual coverage through the Health Insurance Marketplace is available for those who are sole proprietors or self-employed without any employees.
Enrolling In Shop Insurance
There are two choices available for employers when it comes to enrolling in SHOP insurance.
- Through an insurance company
- With the assistance of a SHOP-registered agent or broker
Benefits Of The Shop Insurance
- You control the coverage you offer and how much you pay toward employee premiums.
- You can choose from high-quality private health insurance plans that meet the needs of your business and employees.
- You can choose to offer health-only, dental-only, or both health and dental coverage. If offering dependent coverage and an employee enrolls, the employee’s dependents can enroll in health-only, dental-only, or both health and dental coverage.
- You can start coverage any time of the year.
- If you have fewer than 25 employees, you may qualify for a Small Business Health Care Tax Credit worth up to 50% of your premium costs (up to 35% for tax-exempt/non-profit employers). You can still deduct from your taxes the rest of your premium costs not covered by the tax credit. The tax credit is generally available only when an employer offers SHOP plans. Use the Small Business Health Care Tax Credit Estimator to find out if you may qualify and how much you may save.
How To Know If You Qualify For Shop
- SHOP insurance is available to employers with 1-50 full-time equivalent (FTE) employees in most states (in some states, employers with 1-100 employees qualify).
- You must offer SHOP coverage to all of your full-time employees – generally those working 30 or more hours per week on average.
- In many states, at least 70% of employees offered coverage must accept the offer, or be covered by another form of coverage, for the employer to participate. (Employers who apply for or renew SHOP coverage between November 15 and December 15 each year can enroll without meeting this requirement.)
- You must have an office or employee work site within the state whose SHOP you want to use.
Where To Buy A Health Plan
If your business has a staff of 1-50 employees, you have multiple choices available.
- Small employer market: Any business with 1-50 employees can buy health insurance in the small employer market. You buy directly from an insurance company or from an insurance agent or broker.
- Association health plans: Small businesses can buy health insurance through an association.
- Don’t buy a health plan: You can decide to not buy group health insurance and let employees buy their own individual health plans.