For many small businesses in Montana, providing health benefits is the key to recruiting and retaining the best employees. Health insurance isn’t cheap, however, and it can be especially hard for small businesses to find affordable coverage.
Businesses with 49 or fewer full-time or full-time equivalent employees (FTE) are not required to offer coverage to their employees. These employers will not face tax penalties if they choose not to offer coverage. However, the law created a way for your employees — and yourself — to buy quality health insurance through the SHOP.
Starting November 1, 2015, you’ll be able to apply, compare plans, and enroll in a SHOP plan online at healthcare.gov or by calling 1-800-706-7893. Your employees will be able to enroll in your plan online, too, making the process easier for everyone.
Health insurance agents and brokers registered with the SHOP Marketplace will have special online features that make it easier for them to help you apply, choose coverage, enroll, and manage your coverage — if you authorize them to help. Agents certified to assist you find insurance in the SHOP receive federal and state training and are certified by this office. We maintain a list of all certified agents.
The Small Business Health Options Program or SHOP
Small businesses with 50 or fewer full-time equivalent employees can use Montana’s SHOP at healthcare.gov to offer coverage to their employees. There is a calculator at healthcare.gov that can help you determine if you qualify as a small business. You must have at least one employee who is not related to you to qualify for the SHOP.
The SHOP allows employers to choose coverage offered by different companies. The employer chooses the amount (percent of premium) the business will contribute towards a plan choice. Beginning with the 2017 plan year, small employers electing coverage in the SHOP will have the option of vertical choice, offering plans across all metal levels (platinum, gold, silver, and bronze) from one insurer. For more information about shopping for and buying insurance, check out our Health Insurance Buyer’s Guide. Three Montana health insurance companies are selling plans in the SHOP: Blue Cross Shield of Montana, PacificSource and the Montana Health CO-OP.
The Small Business Tax Credit
While small businesses are not required to offer health insurance coverage to their employees, tax incentives are available to help businesses offer insurance for the first time — or maintain the coverage you may already be offering. The Small Business Health Care Tax Credit is for employers with fewer than 25 full-time equivalent employees who earn an average of $50,000 a year or less and contribute a uniform 50% or more toward employee’s self-only premium costs. Learn more about small business tax credit eligibility at HealthCare.gov.
Businesses may only collect this credit for two years. The tax credit is available only for plans purchased through the SHOP Marketplace. In the 2014 tax year and beyond, the tax credit is worth up to 50% of the employer’s contribution toward employees’ premium costs.
What’s it going to cost?
You may also purchase coverage for your employees outside the SHOP website. There are several other insurance companies who sell small group insurance, but outside the SHOP website.