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California Small Employers May Enroll Now for Health Care Coverage Beginning Jan. 1

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The December 6th CalChamber Alert Newsletter reported that Covered California, the state’s marketplace for the federal health care reform law, has launched the full self-enrollment function of the Small Business Health Options (SHOP) online marketplace. This significant new function on the Covered California website will enable small business owners with one to 50 eligible employees to fully enroll for coverage now that may begin as early as January 1, 2014. Online enrollment for small businesses in 36 other states relying on the federal exchange has been delayed for a year by federal officials while they work on making the federal health care insurance website workable for individuals seeking to shop for insurance.

"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 in a press release. "Since October, more than 1,500 small business owners have begun the process of exploring whether the SHOP program is right for them."

New Features

Previously, small business employers have been able to register online, check their eligibility and work with a Certified Insurance Agent to obtain a quote. New system enhancements now allow online enrollment for SHOP, including online quoting; the ability to submit an online application at www.coveredca.com in real-time; and the ability for employers to initiate electronic open enrollment for their employees.

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. 

Tax Credits

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 Covered California’s 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% 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.

About SHOP

The Patient Protection and Affordable Care Act includes provisions to encourage small businesses to offer health coverage to their employees.

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, comparable to how large companies shop for employee health insurance.

In 2014, health insurance companies participating in SHOP are: 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 voluntary and small businesses will not be penalized for non-participation. Small businesses can enroll in a SHOP plan year round, according to the Covered California press release.


 
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