The holiday season is the busiest time of year for many small business owners, and with health care renewals looming on the horizon in 2015, entrepreneurs have one more thing on their list to consider as they look towards January 1. As small business owners consider renewing their health care coverage, it's important for them to know there are some small business-friendly features of the new health care law coming their way. Below are some important aspects of the new health insurance marketplaces that can help small employers get the information they need about their options for health coverage in 2015.
As of November 15, 2014, small business owners have the ability to enroll online for coverage through the new small business health insurance marketplaces, or SHOP for short. For small business owners with fewer than 50 employees looking for a new way to shop for coverage, they can log on now to their state's SHOP website to browse, compare plans and fill out their applications online. There's no deadline to enroll through SHOP -- the marketplaces offer year-round enrollment for small businesses.
What's more, small employers that do offer coverage through the marketplace may also be eligible for a tax credit of up to 50 percent of their premiums. Employers can check out Small Business Majority's tax credit calculator to see if they're eligible and to receive a tax credit estimate.
Changes to Minimum Participation Rate
In order to enroll in a plan through SHOP, small businesses must have at least 70 percent of their employees enroll in their group plan. In order to help small businesses reach this minimum participation rate, the Department of Health & Human Services is making some changes to the way the rate is calculated. Essentially, any employee who is covered elsewhere (through spousal coverage, the individual marketplace, Medicaid, Medicare, etc.) will be taken out of the calculation altogether. This will make it easier for an employer to get to the 70 percent minimum participation rate. This new rule, expected to be finalized in February or March, will help make SHOP more accessible for small businesses looking to offer coverage through the new marketplaces.
Employee Choice in SHOP Marketplaces
Many states will begin offering employee choice in 2015. For those who aren't familiar with it, employee choice is a feature of SHOP that allows small business workers to choose from a number of plans from different insurance carriers. This allows employees to choose which carrier they'd prefer to use, instead of the business owner choosing for them. We know from our polling that small business owners like this option. Our scientific polling found two-thirds of small employers believe allowing employees to choose among multiple carriers is an important element of the health care marketplaces. And for small businesses, this component is fundamental in distinguishing the new insurance marketplaces from the outside health insurance market.
Small business owners may find they can get a better deal on health insurance through SHOP. For small businesses that buy a plan that's compliant with the health care law, they will no longer be charged more for female workers or for employees who have pre-existing conditions. What's more, there are new limits in place as to how much more employers can be charged for their older workers. Small businesses could save money by buying a compliant plan through the new health insurance marketplaces, or buy a health care plan with better coverage for about the same cost as their current plan. It's important that when renewing coverage, employers check out these options before deciding on a plan for the year.
Small business owners should be aware that by renewing their old plans that are not compliant with the health care law, it does not mean they are locking in their current health premiums for another year. Small employers who renew their current plans could still see a price increase for 2015. This is why it's crucial for small business owners to check out all their options and see if they can get a better deal through SHOP.
In order to begin the enrollment process now, entrepreneurs should visit their state's health insurance marketplace or Healthcare.gov, or they can contact a certified health insurance broker who can assist with the enrollment process.
To learn more about SHOP, employee choice and enrollment, visit our Health Coverage Guide, which contains a wealth of information for small business owners regarding enrollment, the Affordable Care Act and the health care system in general.
The more small business owners know about these new marketplaces, the easier it will be for them to get their employees and businesses more affordable insurance coverage. And then, instead of worrying about health insurance, they can do what they do best: run the companies that make up the backbone of our nation.