What is SHOP?
Small Business Health Options Program is also known as SHOP. It is an insurance program that was developed to help businesses provide health coverage to their employees. It offers low-cost health insurance options to employees of small companies.
SHOP offers both health and dental insurance and is flexible about the application process as well. Unlike most insurance programs, SHOP doesn’t have date limitations of Open Enrollment.
What is a Small Business Tax Credit?
Along with SHOP, there is also a SHOP Tax Credit, kind of like Obamacare for Individuals if a business qualifies for some type of credit it will lower the cost of health insurance. It is there to encourage small businesses to buy insurance for their employees through the SHOP marketplace.
To qualify for SHOP you can have 1-50 full-time employees, but to potentially qualify for this tax credit, businesses have to have all of the following:
- Less than 25 full-time employees
- Average employee salary is around $56,000 a year or less
- Pay at least 50% of employees' premium
- Offer SHOP coverage to ALL of your full-time employees. (You don't have to offer it to dependents or employees working fewer than 30 hours per week to qualify for the tax credit.)
The Tax Credit could be worth up to 50% of the costs you pay for your employees’ premiums (35% for non-profit employers).
Benefits of going through SHOP:
- You control the coverage you offer and how much you pay toward employee premiums.
- You can choose to offer health only, dental-only, or both together as a combo. If offering dependent coverage and an employee enrolls, the employee’s dependents have the same options.
- You can enroll in a plan any time of the year.
Who might not qualify for SHOP?
Self-employed people and Sole Proprietors with no employees are not eligible for SHOP. People who fall under that category will have to apply as an individual under ACA (Obamacare). If a small business has at least one full-time employee who is not a family member or a fellow owner, then the business can enroll into SHOP.
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