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'SHOP Marketplace' Open for Small Business Owners Wanting to Provide Health Insurance to Employees

Health Insurance
Photo Credit: Tax Credt via Flickr

Although small business owners with less than 50 full time employees do not have to provide health insurance for their employees, those who want to have a helpful resource.  Employers can use the online marketplace called SHOP, which stands for Small Business Options Program.  As KSMU’s Theresa Bettmann reports, the site is part of the new federal health care program.

The SHOP Marketplace gives employer access to different health insurance plans. All of those plans include the “must have” benefits like preventative health care, hospitalization and prescriptions. 

Crystal Irons is the business development specialist with the MU Extension and the Small Business Technology Development Center.  She says many small business owners know that providing solid benefits is key to keeping your employees.

“In the past, small business owners’ premiums have been higher because they didn’t have the purchasing power.  And so the hope behind SHOP is that they will have some purchasing power.  Also some small employers will be able to obtain tax credits to help make this more affordable.  Those tax credits are available for those employers with 25 or fewer employees,” says Irons.

To be eligible for the Small Business Health Care Tax Credit, employers must have an annual wage of $50,000 or less. They also must contribute at least 50 percent toward employee insurance premium cost, Irons says.  She explains that the cost of those premiums is often based on a sliding scale, and that business owners must have a SHOP plan in 2014 to qualify for the tax credit.

Irons warns that time is running out before the March 31stdeadline when individuals without other means of health coverage must have health insurance plans.  She says employers need to be upfront and timely if they don’t plan to offer benefit packages to their workers.

“It is important for employers to understand that their employees all fall under this individual mandate to where they need to have health insurance or they will be facing a penalty.  It’s not the employer’s responsibility in all cases to offer that insurance, so if they’re not going to offer insurance, [it's important] that they steer their employees to an individual plan,” Irons says.

Right now, there's no online registration for SHOP, Irons said.  Employers can enroll in SHOP through a local navigator, like a local insurance agent or broker licensed in the program.   

For KSMU News, I’m Theresa Bettmann.