Answering questions about Small Business Health Options Program (SHOP)



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The government will pay up to half of my company’s health care premiums under the Affordable Care Act, but I have to sign up my business for SHOP (the Small Business Health Options Program), which uses a narrow network for all of 2014 to get it.

That used to be the case, but it changed in August. If you renew your old policy before New Year’s, you can receive the credit without going through SHOP for nearly the entire year. But you will have to sign up through SHOP for part of 2014, even if it’s just the last month.

 

I’d like to sign up for SHOP this year, but you can only do it online, and the site isn’t working.

That changed before Thanksgiving. Businesses can now sign up through their insurance agent. You can just still use the website to compare plans, but you won’t be able to enroll online until next November.

    

The deadline to sign up for SHOP for 2014 is now Dec. 23. I still can’t make that deadline.

You can sign up for SHOP the first half of any month next year to be enrolled by the following month.

 

I don’t like that narrow network, but I heard that the rates are 25 percent cheaper, even before the tax credit. So maybe it will be worth it.

The narrow providers network discount is only for individuals. That’s the deal Anthem Blue Cross and Blue Shield made with those providers.

 

I am not going to bother with SHOP. The tax credit is incredibly complicated.

It’s a one-page tax form with 20 questions on it, and the tax credit can be for as much as half of your premiums.

 

I’ll never get a subsidy. We are not a law firm, but we aren’t McDonald’s either.

Those businesses with an average wage below $50,000 (not counting the owner, but counting other management) are eligible for a tax break. If the average wage is under $25,000, you might get the full 50 percent credit, if your business is small enough. (See below)

 

This is all too complicated for me. Why don’t I just drop coverage and give them the same money in a raise and send them to the exchange as individuals, where they get a better discount and a bigger subsidy?

That might work, but those won’t be pretax dollars, and you will have to pay extra payroll taxes on that salary. On the other hand, if they aren’t getting coverage now, it might be the best option for you. – BOB SANDERS


 

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