Overview of the SHOP Marketplace

Health Care History Lessons

The following information comes directly from the SHOP section of Healthcare.gov.  There are 9 SHOP plans available in Louisiana (and hundreds of other small group options).  We would be happy to show them all to you.  Employers with lower-paid employees in particular will have the most to gain by choosing SHOP plans.  But, there are also other situations that make SHOP a potentially attractive option.  Please take a look and let us know if you need any help evaluating your options.

The Small Business Health Options Program (SHOP) Marketplace is for small employers who want to provide health and dental insurance to their employees — affordably, flexibly, and conveniently.

To use the SHOP Marketplace, your business or non-profit organization must have 50 or fewer full-time equivalent employees (FTEs).

You don’t have to wait for an open enrollment period. You can start offering SHOP insurance to your employees any time of year.

FYI: Self-employed with no employees?Visit the Health Insurance Marketplace for Individuals & Families. The SHOP Marketplace is for business with at least one full-time equivalent (FTE) employee other than owners, partners, or family members. Learn about coverage if you’re self-employed.

5 reasons to use the SHOP Marketplace to offer employee insurance

  1. The SHOP Marketplace offers high-quality plans from private insurance companies.
  2. You have choice and flexibility. You can:
    • Offer your employees one plan, or let them choose from multiple plans
    • Offer only health coverage, health and dental coverage, or only dental coverage
    • Choose how much you pay toward your employees’ premiums, and whether to offer coverage to their dependents
    • Decide how long your employees’ initial enrollment period is, and how long new employees must wait before joining the plan
  3. You can handle everything online — applying, choosing plans, managing your coverage, and paying your premiums — whenever it’s convenient for you.
  4. You can use your current agent or broker, work with any SHOP-registered agent or broker, or handle everything yourself. Our agency is an approved Marketplace broker.
  5. If you have fewer than 25 employees, you may qualify for a Small Business Health Care Tax Credit worth up to 50% of your premium costs.

Next steps to offer SHOP health insurance

Questions?

More answers: The SHOP Marketplace

Affordable Care? 2017 Rates are Out Now!

middle-class-worker-help-obamacare

Here is a personal look at the impact of the impact the Affordable Care Act has had on me and my family.  For reference, in the beginning of 2016, I was 45, my wife 42 and my kids 13, 10 and 5.  Unfortunately, we are all a year older going into 2017.

I am using Blue Cross of Louisiana’s most popular Gold-level plan for my unsubsidized premium comparison.  The plan has a $1,000 deductible ($3,000 for the family) and and out of pocket maximum of $5,000 going down to $4,800 in 2017 ($10,000 going down to $9,600 in 2017 for the family).

  • 2016 Premiums – $1,583.70 per month or $19,004.40 for the year
  • 2017 Premiums – $2,023.05 per month or $24,276.60 for the year

That is an increase of $439.35 per month or $5,272.20 for the year.  It also represents a 27% rate increase.  OUCH!!!

My wife and I both work (pretty hard, I might add).  To be fair, if our combined income was lower, we would qualify for some help with this premium.  You can check your own subsidy availability here.  At $113,000 in combined family income, we would qualify for $303/month in help.  At $114,000 or more, we do not qualify for any help.  I think this is what President Clinton referred to as “the craziest thing in the world.”

Some more broad trends of note:

  • the % increase on some “more affordable” plans (silver and bronze level) is as much as 44%
  • there are more “narrow network” plans this year – both in total number and more drastically in % of total plans available.
  • comparable small group plans are significantly better priced and offer significantly more coverage options.  See – The Small Business Health Insurance Roller Coaster – What is Next? – If you have a business or influence with your small employer, it may be time to run some numbers.

I hope our next President and Congress work together for a better solution for all of our sake. This is not sustainable.

 

The Small Business Health Insurance Roller Coaster – What is Next?

I have spent my entire 24 year career helping employers shop for, buy and manage their employee benefits.  In that time, the vast majority of large employers (50+ employees – for this discussion) have offered (and plan to continue to offer) their employees health insurance.  In 2010, the Affordable Care Act introduced new incentives (see employer shared responsibility penalties) to make sure that continues.  So far, it looks like that is happening as expected.

However, the small employer market (under 50 employees – not subject to employer mandate) has been much more volatile over the last 15 years.  That volatility has intensified in recent years. – peaking at 66% in 2010 and then bottoming out at 52% just 4 years later.

2015-employer-health-benefits-chart-pack-12-1024

 

Why has this happened and what does the future hold for small employers?

For small businesses, the initial decision to offer benefits is almost always driven by a key employee/employees who push the issue with the business owner.  Leading up to the 2010 passage of the Affordable Care Act, every news organization, talk show, politician, etc. talked about healthcare and health reform in some form just about every day. So, naturally, employees who had not thought about it before, were now asking about it.  Employers who hadn’t offered coverage before decided to make an offer for the first time.

This led to an almost 10% jump in firms offering health benefits from 2009 to 2010.  But, that increase completely vanished in 2011.  And, over the following years, the trend to away from group insurance increased as the % of firms offering health benefits reached a 15+ year low in 2014.

For employers with a higher percentage of low income employees, the move away from group insurance may continue.  This is because these employers cannot (and do not want to) compete financially with the subsidy available to low income employees.  Here is an example of how income impacts an individual’s coverage choices:

An unmarried 40 year old with 2 children under 18 years old can expect to pay about $391/month for herself or about $779/month for her and her children with no subsidy or medicaid available. She will also have the following subsidy options at different income levels:
Household Income Medicaid? Subsidy – Net cost
$25,000 Yes – entire family None – $0/month
$35,000 Yes – children only $180/month – $211/month
$45,000 Yes – children only $59/month – $332/month
$55,000 No $254/month – $525/month
$65,000 No $138/month – $641/month
$75,000 No $57/month – $722/month
$85,000 No None – $779/month

However, I expect that employers with higher-paid and geographically diverse employees will see that trend of moving away from group coverage reverse considerably.  This has already started and will accelerate very quickly.  Here are the 3 main drivers of that move:

  • Taxation of Employer Contribution to Individual Plans – In an updated Q&A about the practice of reimbursing individual health premiums, the IRS Q&A warns: “such an arrangement fails to satisfy the market reforms and may be subject to a $100/day excise tax per applicable employee (which is $36,500 per year, per employee) under section 4980D of the Internal Revenue Code.”  Though there are pockets that disagree with this interpretation and are fighting for a change, most have come to grips that it is best to avoid the practice rather than risk penalties.
  • Implosion of the Individual Health Insurance Market – Just about every carrier that has offered products on the individual exchange has lost money.  Some have lost so much money, they have decided to get out of the exchanges altogether.  The carriers that have remained have increased their prices significantly while drastically limiting their product offering – eliminating platinum-level plans, restricting the number of zip codes that they offer policies AND introducing more and more “narrow” network options.
  • Small Group Relative Stability – Trend price increases for small group (and group in general) have been modest in comparison to what we were seeing a few years back (pre-ACA) AND are modest compared to increases we have seen and expect to see in the individual market. In addition, there are now considerably more plan options to choose from in group vs. individual.  And finally, the price of comparable group plans are less than individual plans with similar benefit levels.

Individuals who are not eligible for subsidies because of their income will discover this discrepancy and push for change from their employer.  It will start with the business owner who is just a phone call or email away from discovering what this means to them and their families.

If you own a small business and want to see how all of this impacts you, your family and your employees we are always here to help.

 

Small Business Health Options Program (SHOP) Marketplace

The Small Business Health Options Program (SHOP) Marketplace on HealthCare.gov is open to small employers with 1-50 employees. Small employers can offer their employees (and, dependents, if they choose) health and dental insurance at any time of year through the SHOP Marketplace.

Below are a few new videos that give a quick overview of the program.  It only takes a few minutes to see if you qualify.

The Small Business Health Care Tax Credit

small-business-health-insurance-minYou may qualify for employer health care tax credits if you have fewer than 25 full-time equivalent employees making an average of about $50,000 a year or less.

See if you qualify for the Small Business Health Care Tax Credit

To qualify for the tax credit, all of the following must apply:

  • You have fewer than 25 full-time equivalent (FTE) employees
  • Your average employee salary is about $50,000 per year or less
  • You pay at least 50% of your full-time employees’ premium costs
  • You offer coverage to your full-time employees through the SHOP Marketplace. (You don’t have to offer it to dependents or employees working fewer than 30 hours per week to qualify for the tax credit.)

The tax credit is worth up to 50% of your contribution toward your employees’ premium costs (up to 35% for tax-exempt employers).

Higher benefits for smaller businesses

The tax credit is highest for companies with fewer than 10 employees who are paid an average of $25,000 or less. The smaller the business, the bigger the credit.

Questions?