North Bay Business Journal

Tuesday, December 3, 2013, 1:53 pm

State exchange unveils plans for small firms


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    SACRAMENTO — After delaying the Small Business Health Options program for two months, Covered California announced the SHOP online marketplace is fully functional and ready to enroll small-business owners into health plans.

    Covered CaliforniaCovered California, the state’s online health benefits exchange established under the Affordable Care Act, said the “significant new function” of the exchange will permit businesses with 50 or fewer employees to enroll in coverage that could take effect as soon as Jan. 1, 2014.

    Before the runup to the enrollment season, Covered California had said the SHOP side of the exchange would be ready to launch on Oct. 1, but it opted instead to focus on the individual side, a much larger portion of its target audience.

    But while the SHOP program was delayed in California, the announcement  came just days after the federal government said it would delay the federal version of SHOP for another year as it struggles to fix numerous problems with the website Healthcare.gov. By comparison, California’s exchange has had a much smoother launch.

    “Small businesses now have new options to provide more choice for their employees and new affordable options for their business,” Covered California Executive Director Peter Lee said in a statement. “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.”

    Previously, small-scale employers were able to register online, check eligibility and work with certified insurance agents to obtain a quote. Now, the new system enhancements allow online SHOP enrollment, including online quoting, the ability to submit an online application in real-time and the ability for employers to initiate electronic open enrollment for their employees, according to Covered California.

    The exchange projects 7,000 employers will enroll. Many of those are eligible for tax credits.

    Beginning in 2014, the only way for small businesses 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 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.

    “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,” Mr. Lee said.

    In addition to purchasing coverage through 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. More than 7,000 agents currently are certified and available to help individual consumers and small employers in the Covered California marketplace.

    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. 

    Small businesses are not required to buy insurance for their employees. SHOP is completely voluntary, and small businesses will not be penalized for nonparticipation. Small businesses can enroll in a SHOP plan year-round.

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