Small Business Health Options Program (SHOP Marketplace)

1. Small Business Health Options Program (SHOP Marketplace)

2. What is the Small Business Health Options Program (SHOP)? • The SHOP Marketplace is an avenue on the federal Marketplace for small businesses to purchase health insurance coverage for employees • Simplifies the process of buying health insurance • Helps curb premium growth and spurs competition based on price and quality • Provides access to a small business tax credit

3. The Navigator’s Role • Navigators are permitted to assist employers with SHOP applications • CACs are not required to

4. Employer Mandate • Starting in 2015, employers with over 50 full-time equivalent employees or a combination of full-time and part-time equivalent employees will be subject to the employer shared responsibility provisions, or employer mandate. • These employers will be subject to a fine collected by the IRS for each month they have one or more full-time employees receiving a Premium Tax Credit (PTC). • Employees can only get PTC if employer-sponsored coverage is not offer or it is considered unaffordable (greater than 9.5% of the employees’ household income) • Employers will not be subject to the shared-responsibility payment if employees that work on average less than 30 hours a week receive a PTC.

5. Employer Mandate

6. How SHOP will work in OEP2 2014-2015 Open Enrollment Period • The SHOP Marketplace is open to employers that meet the following requirements: • Have at least 1 common-law employee on payroll (cannot be a spouse) • Offer coverage to all full-time employees • Less than 50 full-time equivalent employees (FTEs) • 30+ hours or more per week on average • Meet the 70% participation rate of full-time employees offered coverage (does not include spouses or dependents, if offered) • The requirement is waived between November 15th and December 15th of each year

7. SHOP Timeline & Guidelines 2014 • The employer must set a contribution level and select a plan for their employees. • Employers will pay their portion and their employee’s portion of premiums for their group coverage directly to the insurer that issues the coverage • Beginning in 2015, the employer will select a metal coverage level (bronze, silver, gold, or platinum), as well as a reference plan within that coverage level. • The employer and employees portions of the premium will go directly to the SHOP Marketplace 2015

8. SHOP Timeline & Guidelines 2016 • Beginning in 2016, SHOP will be open to employers with up to 100 FTEs • Employers that enroll in SHOP coverage and then grow past the small group limit for employees may continue with their SHOP coverage, and renew their SHOP coverage.

9. Calculating Full-time Equivalent Employees (FTEs) To calculate full-time equivalent employees (FTEs): • Use the most recent year • Exclude seasonal employees (those working <120 day a year) • Count the number of people who worked an average of 30+ hours a week • Add this amount to the number of hours worked per week by non-full time employees divided by 30

10. Calculating Full-time Equivalent Employees (FTEs) Example: • Mike owns a business with 20 employees. He has: • 15 employees working an average of 40 hours per week • 2 employees working an average of 15 hours per week • 1 employee working an average of 25 hours per week • 2 employees working an average of 27 hours per week • Here’s how Mike calculates his FTEs: • Number of full-time employees = 15 • Non full-time employee hours (15+15+25+27+27)/30 = 3.6 or 3 FTEs (always round down when calculating FTEs) 15 full-time employees + 3 FTEs = Mike has 18 FTEs

11. Minimum Participation Rate for SHOP • What if a business does not reach the minimum participation rate? • Change offer of coverage • e.g. Increase the amount employer contributes to employees’ insurance premiums to encourage more participation • Change of offer cancels current offer, and the process starts over with a new enrollment period • Enroll between November 15th and December 15th. The minimum participation requirement does NOT apply during this annual enrollment period • Completely withdraw offer of coverage • An employer can reapply at any time during the same calendar year if minimum participation was not met • Mid-year changes in participation do not affect ability to maintain coverage

13. Insurance Carriers • The amount of available plans often depends on the county and size of the business • Healthcare.gov offers a plan estimator tool like the one available for individuals and families • The following carriers offer health coverage in SHOP throughout Indiana: • Anthem Blue Cross and Blue Shield • Physicians Health Plan (PHP) • The following carriers offer dental coverage: • Anthem Blue Cross and Blue Shield • BEST Life • Dentegra Insurance Company • Guardian

14. Benefits of SHOP • Apply year-round • Control the coverage offered and how much is paid toward employee premiums • Choose from the 4 tiers of coverage to find a plan that meets the needs of the business and employees. • Start coverage any time • Establish an open enrollment period of at least 30 days • Same coverage start dates on the individual Marketplace apply in SHOP • SHOP coverage for businesses with fewer than 25 employees may qualify for a small business health care tax credit

15. Actuarial Value • Like the Individual Marketplace, plan benefits on SHOP offer essential health benefits (EHBs) and vary within metal levels

16. Rules and Changes • Currently, businesses are only allowed to offer one health plan (and one dental plan if the health plan doesn’t offer pediatric dental coverage) • Beginning in 2015, all SHOP Marketplaces will be able to offer multiple health plans for employees to choose from • A stand-alone dental plan may be offered Since the Small Business Health Care Tax Credit became available in 2010, small employers have received more than $1 billion in tax credits for their contributions to employee premium costs.

17. Rules and Changes Until 2016, groups with more than 50 employees are subject to different rules than groups with less than 50 employees • Insurers offering coverage to large groups ( > 50 employees) will not need to provide the essential health benefit package • The shared responsibility requirement is applied to employers with 50+ full-time or FTE employees • These employers are not yet required to offer health insurance, but imposes financial penalties if their employees qualify for PTC for individual coverage, either because the employer did not offer coverage or offered coverage deemed unaffordable

18. Appeals • SHOP eligibility is determined within 3-5 days of receiving a completed application • An employer can appeal SHOP decisions in 2 cases: • Receiving a notice that denies SHOP eligibility • The SHOP Marketplace hasn’t made a SHOP eligibility determination in a timely manner • Employers have 90 days from the date of the notice to request an appeal • Appeal request form should be mailed, or a letter should be written including name, address, phone number and explanation • If appeal determines eligibility for SHOP, the decision must be retroactive to the date the incorrect determination was made

19. Small Business Health Care Tax Credit • Business must have an official eligibility determination from the SHOP Marketplace before the end of 2014 • Employer claims the tax credit when submitting federal income tax returns for 2015 using form 8941 • To qualify, 50% of the full-time employees’ premium costs must be paid by the employer • Tax credit is worth up to 50% of the employer’s premium contribution (up to 35% for tax-exempt employers) • Businesses with < 25 employees making an average of ≤ $50,000 may qualify for tax credits if purchasing through SHOP • Add total amount of wages paid during the tax year and divide by number of full-time employees, rounding down to nearest $1,000 The smaller the business, the bigger the credit.

20. Frequently Asked Questions • Can an employer continue SHOP coverage if they fall below minimum participation rate during the plan year? • Yes, mid-year changes in participation rate don’t affect the ability to maintain coverage. Participation rate is calculated only during initial enrollment and renewal. • What if someone owns their own business but does not have any employees? • They are not eligible to purchase small group health insurance through the SHOP Marketplace, but they can purchase through the Individual Market • A person who runs an income-generating business with no employees is considered self-employed • This is true even if the owner hires independent contractors to do some work

21. Frequently Asked Questions • If employer offers SHOP coverage to employees, can the employee opt out and enroll in Marketplace plan? • They can decline if they have access to coverage through other programs such as Medicaid or through a spouse • They can also go to the Marketplace, but if SHOP coverage meets the affordability requirements, then they will not be eligible for CSR and APTC

22. Tips for Assisting Consumers • Prescreen employers based on number of full-time employees or full-time equivalent employees and average incomes • Employer should have list of all employees on staff and how many hours each employee works • Use the Premium Estimator Tool with employers which will show a list of available plans in their area • Use the Full-time Equivalent (FTE) Employee Calculator • Encourage consumers to keep a copy of SHOP eligibility determinations for tax filing purposes

23. Resources for Assisters

24. Resources for Assisters • About the Small Business Health Options Program (SHOP) • SHOP Marketplace • Overview of the SHOP Marketplace • Small Business Healthcare Tax Credit Estimator on healthcare.gov • Sample employer application • Sample employee application