On December 2, Covered California officially launched the full self-enrollment function of the Small Business Health Options (SHOP) online marketplace. This new function on the Covered California website will enable small businesses to fully enroll for coverage that may begin as early as January 1.
“Small businesses now have new options to provide more choice for their employees and new affordable options for their business,” said Covered California Executive Director Peter V Lee. “Covered California has created the Small Business Health Options Program to help the small business owners to get the best value for themselves and their employees. Since October, more than 1,500 small business owners have begun the process of exploring whether the SHOP program is right for them.”
Small-business owners with one-to-50 eligible employees may now enroll in SHOP plans for coverage effective January 1. Like the health insurance plans in Covered California’s individual market, SHOP plans were negotiated to bring a standardized set of benefits, a robust provider network and a broad choice of health insurance plans with competitive pricing to employers and their employees.
Previously, small business employers have been able to register online, check their eligibility and work with a Certified Insurance Agent to obtain a quote. The new system enhancements now allow online enrollment functionality for SHOP, including online quoting, the ability to submit an online application at www.coveredca.com in real-time, and for employers to initiate electronic open enrollment for their employees.
Many small business owners qualify for a federal tax credit to help offset contributions toward employee premiums. Beginning in 2014, the only way for small-business owners to access the tax credits is to purchase insurance through SHOP. Small businesses are eligible for a federal health care tax credit if they have fewer than 25 full-time-equivalent employees for the tax year, pay employees an average of less than $50,000 per year and contribute at least 50 percent of their employees’ premium cost. Employers with 10 or fewer full-time-equivalent employees with wages averaging $25,000 or less per year are eligible for the maximum amount of tax credits.
“The tax credits available to small business through Covered California make quality coverage more affordable,” said Lee. “For example, a beauty shop with 10 full-time employees and total wages of $250,000 that purchases insurance through Covered California’s SHOP may be eligible for a $35,000 tax credit in 2014. We know that the tax credit is meaningful for a lot of small business that have been struggling to obtain quality, affordable coverage for their employees.”
In addition to purchasing coverage on the Covered California website, Covered California SHOP plans are sold through licensed agents who are trained and certified by Covered California. Since registration opened in August, more than 22,000 licensed agents have signed up to become certified to sell Covered California products, with more than 7,000 agents currently certified and available to help individual consumers and small employers in the Covered California marketplace.
The increased website functionality also includes a number of new features available for the Certified Insurance Agent community, such as the ability to create an online profile for an individual consumer or small employer; the ability to start and submit an application on behalf of an individual or small employer; and, the ability to process and manage employer online enrollment applications for SHOP.
The Affordable Care Act includes provisions to encourage small businesses to offer health coverage for their employees by making insurance more affordable and easier to purchase. Covered California created SHOP to facilitate the purchase of affordable health insurance for small-business owners.
SHOP is a second marketplace—separate from the one for individuals—and is designed to give employers and their employees more options for health coverage. Using this marketplace, small-business owners can shop for health insurance in ways that offer convenience and choice, which is comparable to how large companies shop for employee health insurance today.
Health insurance companies participating in SHOP include: Blue Shield of California, Chinese Community Health Plan, Health Net, Kaiser Permanente, Sharp Health Plan and Western Health Advantage. These plans will be sold through Certified Licensed Insurance Agents trained and certified by Covered California.
Small businesses are not required to buy insurance for their employees. SHOP is completely voluntary, and small businesses will not be penalized for non-participation. Small businesses can enroll in a SHOP plan year round.
Covered California is the state’s marketplace for the federal Patient Protection and Affordable Care Act. Covered California, in partnership with the California Department of Health Care Services, was charged with creating a new health insurance marketplace in which individuals and small businesses can get access to affordable health insurance plans. With coverage starting in 2014, Covered California helps individuals determine whether they are eligible for premium assistance that is available on a sliding-scale basis to reduce insurance costs or whether they are eligible for low-cost or no-cost Medi-Cal. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Small businesses can purchase competitively priced health insurance plans and offer their employees the ability to choose from an array of plans and may qualify for federal tax credits.
Covered California is an independent part of the state government whose job is to make the new market work for California’s consumers. It is overseen by a five-member board appointed by the governor and the legislature. For more information, visit www.CoveredCA.com.