Below are some of the most important questions to ask yourself prior to considering Covered California Small Business Health Options Program (SHOP) or any other private medical insurance plan.
- Do you have 2-50 employees? If so, you are eligible to consider Covered CA SHOP. You may offer employee benefits and receive either a 35% or 50% premium tax credit for your business. In 2015, companies with 2-100 employees will be able to enroll in SHOP.
- Does your company qualify for tax credits? If you are an employer with 24 or less full-time-equivalent employees (excluding owners)with an average salary of $50,000 per year you are eligible for a subsidy by enrolling in Covered CA. You cannot get this subsidy by enrolling with a private insurance carrier or private exchange which falls outside of the Covered CA program.
- Do you want your employees to complete online applications? Currently SHOP is the only medical program that allows employees to complete online applications with Kaiser, Blue Shield, Health Net, Sharp, Chinese Community Health Plan and Western Health Advantage. All of the private medical insurance carriers and the private exchanges require paper applications for the initial enrollment and other employee changes.
- Would you prefer to pay more money up front in premium (monthly policy charge) or less money when you see the doctor or go to the hospital? Whether you enroll in Covered CA SHOP or a private insurance plan, if you want to lower your monthly premiums you should pick a high-deductible or Health Savings Account plan. If you prefer lower co-pays and low deductibles and out-of-pocket expenses, then your monthly premiums will be considerably more upfront.
- Are you required to offer medical insurance if you have 2-50 employees? Small group employers are not required to offer medical insurance to their employees. In 2015, the employer mandate will require all employers with 51 or more employees to provide medical insurance to their employees otherwise there will be severe penalties.
- Do you want to provide one simple base benefit for all employees whether on a PPO or HMO plan? Covered CA SHOP requires that employers pick one metal plan (platinum, gold, silver or bronze) to serve as the base plan for employees to choose from. No longer will groups pick a base plan with an HMO carrier and a separate based plan with a PPO carrier as with the private insurance market.
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