guestphotoThe Affordable Care Act means change for businesses, but if you understand the Small Business Health Options Program (SHOP), you’ll be able to assess the pros and cons for your business and avoid the stress.

The Patient Protections and Affordable Care Act (PPACA) became law in March 2010.  The law requires state health insurance exchanges to set up the Small Business Health Options Program (SHOP).  The SHOP will provide a multi-carrier, multi-tier opportunity for small business owners to provide affordable group health insurance to employees.

As of October 1, 2013, small business owners are  able to select insurance coverage through their State Health Exchange throughout the United States.  Each state defines what “small’ business means. The health exchange provides a market for insurance carriers to compete for employer-sponsored small group health insurance.  The goal is to provide a level playing field for companies to compare health insurance options.

Four Metal Tier Options:

  1. Bronze provides coverage for employee medical bills at 60% to carrier and 40% to patient.
  2. Silver provides coverage for employee medical bills at 70% to carrier and 30% to patient.
  3. Gold provides coverage for employee medical bills at 80% to carrier and 20% to patient.
  4. Platinum provides coverage for employee medical bills at 90% to carrier and 10% to patient.

Three Key Facts:

  1. All employers with 51% of their employees residing in their state are eligible for SHOP, some business will be eligible for new federal tax credits.
  2. The employer chooses the Metal Tier health plan and the employee chooses the carrier and plan within the Metal Tier that best serves their needs.
  3. The multi-carrier, multi-tier structure provides many options for employers to budget affordable contributions and provide employees with solutions that serve their needs.

If you employ less than 25 full-time equivalent employees with salaries below $50,000 a new federal tax credit up to 35% for 2013 and 50% for 2014 may apply.

For more information, you can visit the government site at

Guest authors:

  • Bill Catanese (emailis CEO with Open Harbor Insurance Services and has trained over 7,000 licensed insurance agents. 
  • Harvey Warren (emailis a Financial Guide with MassMutual Financial Group, a regular guest on the Hallmark Channel, and the author of Drop Debt, a consumer’s guide to getting through excessive debt.  

Photo Credit: Alan Cleaver