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Affordable Care Act’s SHOP plan aims to help small firms find health care options

CHART: Small Business Tax Credits in 2014
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Updated: December 4, 2013 6:17AM

Small business owners who might have wanted to offer their employees health insurance but couldn’t afford to could have new options to do so on the Affordable Care Act’s website.

The Small Business Health Options Program (SHOP) Marketplace, at, is a new program that’s supposed to simplify the process of buying health insurance for small businesses with 50 or fewer full-time employees.

Opening of the online SHOP Marketplace originally was delayed a month, to Nov. 1. But recently, because of the glitches many Americans are experiencing on, the federal government said SHOP would premiere on the website there in November. A spokeswoman for the Centers for Medicare and Medicaid Services declined to be more specific. The earliest the program would have taken effect was Jan. 1.

Owners who have fewer than 25 employees who make an average of about $50,000 a year may qualify for a tax credit if they purchase an insurance plan on the SHOP Marketplace. Tax credits could pay up to 50 percent of their premium costs.

In addition, the SHOP Marketplace allows small business owners to buy insurance as one large risk pool, similar to how large businesses purchase plans, so they potentially can get a lower price, the federal government noted.

But small businesses with fewer than 50 full-time employees are not required to provide their workers with health insurance, and unlike individual consumers, they face no deadline when it comes to purchasing insurance. So what’s in it for them to shop on the marketplace?

Experts note that small businesses view offering health insurance to their workers as a way to attract and retain desirable workers.

Generally, plans inside and outside of the SHOP must mirror each other, meaning they must offer the essential health benefits and must not restrict people with pre-existing conditions, said Drew Crouch, director of government relations for Chicago-based Buck Consultants.

Yet, the SHOP Marketplace “will definitely make plan comparison shopping much easier once the system is completely up and running,” said Linda J. Blumberg, a senior fellow at the Urban Institute Health Policy Center.

“The SHOP gives employers another set of insurance options beyond what they have today, and these options … may be more attractive than what they’ve been getting, can continue to get outside,” Blumberg added, noting the tax credits.

Small employers face a steep learning curve with regard to the SHOP and what it offers, though, Blumberg said. While the SHOP exchanges showed substantial appeal to small business owners, they also held negative feelings toward the law, a June study by the Urban Institute and the Robert Wood Johnson Foundation showed. The study looked at six states, not including Illinois.

Experts recommended that small businesses consult brokers to compare different plans.

At least one business owner, Sharon Hoyer, has high hopes for what the new SHOP Marketplace will offer.

She’s the general manager for Dill Pickle Food Co-op in Logan Square, which has nine full-time employees who should be eligible for Hoyer to purchase health insurance on the SHOP Marketplace.

Though the company already buys health insurance, Hoyer said, “My hope is that the SHOP exchange will have competitive premium rates with our current insurance plan,” especially once the tax credit is factored in.

For more information about SHOP, visit


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