Love it or hate it, Americans have anticipated universal health care reform for more than three years since the passage of the Affordable Care Act in 2010. And while the jury of public opinion is still out, Obamacare is here to stay. The reform features an online enrollment program tailored specifically for small business owners, known as the Small Business Health Options Program (SHOP), which means new options, new challenges, and new questions for these businesses and their employees.
Based on early observations of SHOP, we’re breaking down the good, the bad and the yet to be determined.
SHOP was designed with the best of intentions for small business owners. It allows businesses with 50 employees or fewer to find and purchase affordable insurance plans for their employees. These small businesses have traditionally paid much higher costs than large businesses to cover their employees, and in theory, the lower costs should help small business owners serve their employees better and attract new, valuable workers. Additionally, insurance companies are no longer allowed to turn small businesses down for coverage based on the health status of employees and their dependents, even if they have pre-existing conditions.
Once they purchase a plan, small business owners may be eligible for a tax credit through SHOP. In some cases, businesses with 25 employees or fewer could receive a credit of up to 50 percent of the cost of insurance premiums, and the smaller the business, the bigger the credit.
By cutting costs, streamlining the enrollment process, and offering tax breaks, the program makes it easier than ever for small business owners to purchase coverage for their employees. But if that sounds too good to be true, it probably is.
Some insurance companies have said that they will offer fewer options and a smaller network of doctors and hospitals in order to offer the affordable prices that the government wants. This could mean that small business owners have to settle for less robust coverage, or work a little harder to find something that fits their employees. Regardless of what plan they choose, though, all small business owners will have to devote a significant amount of time and energy to figuring out the new requirements and choosing whether or not to participate. The government has set up several tools to help small business owners navigate the policies, including the SHOP Marketplace website and the Small Business Health Care Tax Credits Estimator, but small businesses don’t often have the ability to delegate this process to a human resources department or a legal team like many large companies do.
The billion-dollar question is whether the Affordable Care Act will actually work. The law does not require small business owners to offer health insurance, but SHOP certainly encourages them to do so by boasting choice and affordability.
For the first year, though, small business owners in most states will only have one policy to choose from thanks to setbacks within the federal government’s exchange system. The government still hopes to expand the program to give small business owners the ability to choose the best policies that work for their employees individually, but for now, it’s one of the many unanswered questions about health care reform.
Despite the intended benefits of SHOP, many small business owners are holding off enrollment because of the complexity of the program. Specific policies and procedures vary by state, but for information, small business owners can visit www.healthcare.gov/smallbusinesses.
How do you feel about SHOP as it affects your small business? Tell us what you think in the comments below.