Small Business Health Options Program (SHOP)

Scope

State insurance exchanges began operating a SHOP in 2014. Through this program, employers can offer coverage from multiple insurers, just like larger companies and government employee plans, but get a single bill and write a single check. SHOP exchanges can also allow employers to select a single plan to offer its employees, like is typically done today. Minimum participation rules may be met through coverage in any SHOP plan, not a single particular plan.

Regulatory citations

• None

Key definitions

• None

Summary of requirements

Exchanges will decide how a SHOP is structured. Specifically, exchanges are able to decide:

• The size of small businesses that can participate in SHOP: States can set the size of the small group market at either 1 to 50 or 1 to 100 employees until 2016. In 2016, employers with between 1 and 100 employees can participate in a SHOP. And, starting in 2017, states have the option to let businesses with more than 100 employees buy large-group coverage through the SHOP.
• Structure of choices for small businesses: Exchanges can choose to offer employers additional ways to provide coverage, including allowing their employees to choose any plan in all levels of coverage or a traditional “employer choice” offer of a single plan.

Starting in 2014, small employers purchasing coverage through a SHOP may be eligible for a tax credit of up to 50 percent of their premium payments if they have 25 or fewer employees, pay employees an average annual wage of less than $50,000, offer all full-time employees coverage, and pay at least 50 percent of the premium.