Small Business Health Options Programs - What Are They and What Will They Offer?
The recently passed healthcare bill is designed to offer individuals access to state-run insurance exchanges in 2014, where they will be able to purchase health insurance that offer minimums of coverage at more affordable rates.
But what about small businesses? There are some mandates from the bill that are beginning to take effect this year, but will small businesses be able to shop on the exchanges as well?
What will be available to small business owners of 100 or fewer employees is access to SHOP exchanges, or Small Business Health Options Programs. These will also be state-run exchanges that will specialize in providing employers that don't have the bargaining power of larger companies with insurance options for themselves and their employees.
The SHOPs will originally be available to small businesses with 50 or fewer employees in 2014, but will extend coverage options to those with up to 100 employees by 2017.
But what about now?
There are some mandates from the healthcare bill taking effect sooner rather than later. The tax credits for offering coverage to employees have received a lot of press, but be sure and talk to your tax-preparer before you file for these. The amount of tax credit you get depends on the number of employees that you have, as well as how much they are paid. The fewer employees you have, and the less you pay them, the more money you'll get back for offering them health insurance.
On the other hand, if you and your employees like the health insurance plan that you offer already, that's fine too. Those plans already offered by employers will be "grandfathered in" when the healthcare bill takes full effect in 2014. All employers with more than 50 employees will be required to offer coverage at that time, but those that already do won't have to abandon their policies so long as they don't change them dramatically.
There are also funds currently allocated to help employers pay the medical costs of early retirees who aren't yet old enough to qualify for Medicare. The temporary Early Retiree Reinsurance Program will provide employers up to 80% of the funds for keeping early retirees covered. There is some concern that the $5 billion allocated for this program won't be enough, but for now it is functioning and ready for small business owners who need assistance.
Finally, small business owners and workers who can't afford coverage due to pre-existing conditions may be able to qualify for high-risk pools that will be offering insurance as of this year. In some cases states themselves are running the high-risk pools, and in other cases states have opted to have them federally run. In either case, another $5 billion has been allocated for those who need immediate treatment and insurance and can't get it.
Of course there are other mandates to keep in mind with the healthcare bill, and they will all take effect gradually between now and 2014. As a business owner it would be wise to sit down with your accountant and you tax-preparer to determine how to manage each mandate as it takes effect.
This is particularly important if you have more than 50 employees, since you will be required to offer some form of health insurance to your employees by 2014, or otherwise pay a fine.
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