What is the Small Business Health Options Program (SHOP)?

• The SHOP Marketplace is an avenue on the federal Marketplace for small businesses to purchase health insurance coverage for employeeso Simplifies the process of buying health

insurance o Helps curb premium growth and spurs

competition based on price and qualityo Provides access to a small business tax

credit

• Navigators are permitted to assist employers with SHOP applications – CACs are not required to

The Navigator’s Role

Employer Mandate

• Starting in 2015, employers with over 50 full-time equivalent employees or a combination of full-time and part-time equivalent employees will be subject to the employer shared responsibility provisions, or employer mandate.

• These employers will be subject to a fine collected by the IRS for each month they have one or more full-time employees receiving a Premium Tax Credit (PTC). – Employees can only get PTC if employer-sponsored coverage is

not offer or it is considered unaffordable (greater than 9.5% of the employees’ household income)

– Employers will not be subject to the shared-responsibility payment if employees that work on average less than 30 hours a week receive a PTC.

Employer Mandate

Employers offering coverage to at least 95% of full-time employees

Employers not offering coverage to at least 95% of full-time

employees

Penalty is the lesser of:$250 per month or $3,000 per year for each full-time employee receiving a Premium Tax Credit, or$167 per month or $2,000 per year for every employee full-time and full-time equivalent employee, excluding the first 30 employees

• $167 per month or $2,000 per year for every employee full-time and full-time equivalent employee, excluding the first 30 employees

How SHOP will work in OEP2

• The SHOP Marketplace is open to employers that meet the following requirements:– Have at least 1 common-law employee on payroll (cannot be a

spouse)– Offer coverage to all full-time employees

• Less than 50 full-time equivalent employees (FTEs)

• 30+ hours or more per week on average

– Meet the 70% participation rate of full-time employees offered coverage (does not include spouses or dependents, if offered)

• The requirement is waived between November 15th and December 15th of each year

SHOP Timeline & Guidelines

•The employer must set a contribution level and select a plan for their employees.

– Employers will pay their portion and their employee’s portion of premiums for their group coverage directly to the insurer that issues the coverage

•Beginning in 2015, the employer will select a metal coverage level (bronze, silver, gold, or platinum), as well as a reference plan within that coverage level.

– The employer and employees portions of the premium will go directly to the SHOP Marketplace

SHOP Timeline & Guidelines

• Beginning in 2016, SHOP will be open to employers with up to 100 FTEs

• Employers that enroll in SHOP coverage and then grow past the small group limit for employees may continue with their SHOP coverage, and renew their SHOP coverage.

Calculating Full-time Equivalent Employees (FTEs)

To calculate full-time equivalent employees (FTEs):-Use the most recent year-Exclude seasonal employees (those working <120 day a year)-Count the number of people who worked an average of 30+ hours a week -Add this amount to the number of hours worked per week by non-full time employees divided by 30

Example: •Mike owns a business with 20 employees. He has:

– 15 employees working an average of 40 hours per week– 2 employees working an average of 15 hours per week– 1 employee working an average of 25 hours per week– 2 employees working an average of 27 hours per week

•Here’s how Mike calculates his FTEs:– Number of full-time employees = 15

– Non full-time employee hours (15+15+25+27+27)/30 = 3.6 or 3 FTEs (always round down when calculating FTEs)

15 full-time employees + 3 FTEs = Mike has 18 FTEs

Calculating Full-time Equivalent Employees (FTEs)

• What if a business does not reach the minimum participation rate? 1. Change offer of coverage

• e.g. Increase the amount employer contributes to employees’ insurance premiums to encourage more participation

• Change of offer cancels current offer, and the process starts over with a new enrollment period

2. Enroll between November 15th and December 15th. The minimum participation requirement does NOT apply during this annual enrollment period

3. Completely withdraw offer of coverage

Minimum Participation Rate for SHOP

• An employer can reapply at any time during the same calendar year if minimum participation was not met

• Mid-year changes in participation do not affect ability to maintain coverage

Insurance Carriers

- The amount of available plans often depends on the county and size of the business- Healthcare.gov offers a plan estimator tool like the one available for

individuals and families - The following carriers offer health coverage in SHOP

throughout Indiana:- Anthem Blue Cross and Blue Shield- Physicians Health Plan (PHP)

- The following carriers offer dental coverage:- Anthem Blue Cross and Blue Shield- BEST Life - Dentegra Insurance Company - Guardian

Apply year-round Control the coverage offered and how much is paid

toward employee premiums Choose from the 4 tiers of coverage to find a plan

that meets the needs of the business and employees.

Start coverage any time Establish an open enrollment period of at least

30 days Same coverage start dates on the individual

Marketplace apply in SHOP SHOP coverage for businesses with fewer than 25

employees may qualify for a small business health care tax credit

Benefits of SHOP

Actuarial Value

Level Plan pays (on average)

Employee pays (on average)

Bronze 60% 40%

Silver 70% 30%

Gold 80% 20%

Platinum 90% 10%

• Like the Individual Marketplace, plan benefits on SHOP offer essential health benefits (EHBs) and vary within metal levels

Currently, businesses are only allowed to offer one health plan (and one dental plan if the health plan doesn’t offer pediatric dental coverage)• Beginning in 2015, all SHOP Marketplaces will be able

to offer multiple health plans for employees to choose from

• A stand-alone dental plan may be offered

Since the Small Business Health Care Tax Credit became available in 2010, small employers have received more than $1 billion in tax credits

for their contributions to employee premium costs.

Rules and Changes

Rules and Changes

Until 2016, groups with more than 50 employees are subject to different rules than groups with less than 50 employees•Insurers offering coverage to large groups ( > 50 employees) will not need to provide the essential health benefit package•The shared responsibility requirement is applied to employers with 50+ full-time or FTE employees

• These employers are not yet required to offer health insurance, but imposes financial penalties if their employees qualify for PTC for individual coverage, either because the employer did not offer coverage or offered coverage deemed unaffordable

Appeals

• SHOP eligibility is determined within 3-5 days of receiving a completed application

• An employer can appeal SHOP decisions in 2 cases:1. Receiving a notice that denies SHOP eligibility

2. The SHOP Marketplace hasn’t made a SHOP eligibility determination in a timely manner

• Employers have 90 days from the date of the notice to request an appeal– Appeal request form should be mailed, or a letter should be written including

name, address, phone number and explanation

• If appeal determines eligibility for SHOP, the decision must be retroactive to the date the incorrect determination was made

• Business must have an official eligibility determination from the SHOP Marketplace before the end of 2014

• Employer claims the tax credit when submitting federal income tax returns for 2015 using form 8941

• To qualify, 50% of the full-time employees’ premium costs must be paid by the employer – Tax credit is worth up to 50% of the employer’s premium contribution

(up to 35% for tax-exempt employers)

• Businesses with < 25 employees making an average of ≤ $50,000 may qualify for tax credits if purchasing through SHOP – Add total amount of wages paid during the tax year and divide by

number of full-time employees, rounding down to nearest $1,000

Small Business Health Care Tax Credit

The smaller the business, the bigger the credit.

Frequently Asked Questions

• Can an employer continue SHOP coverage if they fall below minimum participation rate during the plan year? o Yes, mid-year changes in participation rate don’t affect the ability to

maintain coverage. Participation rate is calculated only during initial enrollment and renewal.

• What if someone owns their own business but does not have any employees?o They are not eligible to purchase small group health insurance through the

SHOP Marketplace, but they can purchase through the Individual Marketo A person who runs an income-generating business with no employees is

considered self-employed• This is true even if the owner hires independent

contractors to do some work

Frequently Asked Questions

• If employer offers SHOP coverage to employees, can the employee opt out and enroll in Marketplace plan?• They can decline if they have access to

coverage through other programs such as Medicaid or through a spouse

• They can also go to the Marketplace, but if SHOP coverage meets the affordability requirements, then they will not be eligible for CSR and APTC

Tips for Assisting Consumers

• Prescreen employers based on number of full-time employees or full-time equivalent employees and average incomes– Employer should have list of all employees on staff and how many

hours each employee works

• Use the Premium Estimator Tool with employers which will show a list of available plans in their area

• Use the Full-time Equivalent (FTE) Employee Calculator • Encourage consumers to keep a copy of SHOP eligibility

determinations for tax filing purposes

Resources for Assisters

SHOP Small Employer Call

Center

General Inquiries: 1-800-706-7893TTY: 1-800-706-7915

Hours: Monday – Friday, 9 AM – 7 PM

Small employers and those helping small employers

Health Insurance Marketplace Call

Center

General Inquiries: 1-800-318-2596TTY: 1-855-889-4325

Hours: 24 hours a day, 7 days a week

Employees and those helping employees

Resources for Assisters

• About the Small Business Health Options Program (SHOP)

• SHOP Marketplace • Overview of the SHOP Marketplace• Small Business Healthcare Tax Credit Estimator on

healthcare.gov• Sample employer application• Sample employee application