Talking SHOP: The ACA & Small Businesses

Did you get your tax return postmarked by midnight on April 18?  Up to 4 million small businesses in the U.S. were eligible for a new health insurance tax credit this year, as part of the ACA. The credit, which took effect in 2010, tries to encourage small businesses to start or continue offering health insurance to low- and moderate-wage workers.
The tax credit is one immediate way the ACA helps small businesses offer health insurance to their employees. By 2014, states are also required under the ACA to establish a Small Business Health Options Program (SHOP) for small businesses to purchase health insurance for their employees through an Exchange.
As states begin to tackle SHOP Exchanges, the HRSA-funded State Health Access Program (SHAP) may be a place to look for ideas. A few SHAP grantee states have already developed programs specifically to help small employers offer insurance to their employees. In addition, some of these states are conducting outreach activities to spread the word about the tax credit. As states begin to think about setting up processes to help small employers, they may want to consider these SHAP models:

• Washington’s Health Insurance Partnership provides subsidies to small employers and to employees to make small group coverage more affordable.  When the federal tax credit became available, HIP developed a fact sheet to educate employers about the ability to combine the federal tax credit with the HIP subsidy.

• Healthy Texas is a reinsurance program developed by the state that lowers premiums for small businesses. One of the carriers that sells Healthy Texas, UnitedHealthcare, has developed a spreadsheet-based calculator that lets small businesses determine whether they are eligible for Healthy Texas as well as for the federal tax credit.

• The Virginia Healthy Small Business Initiative promotes employee health coverage and employee wellness as a business proposition. Through a website, the Initiative provides small employers with information and ideas to promote health and wellness that are adapted from large employer programs. Virginia is also developing a subsidized product for small employers that the Initiative will help market.

• In Maine, DirigoChoice offers subsidies to purchase qualifying employer-sponsored coverage to part time and seasonal workers. Sliding scale discounts apply to monthly premiums, deductibles, and out-of-pocket expenses. Maine has trained insurance brokers to help explain this product to small business owners, whose part-time workers may now be able to afford the company’s insurance offering.

What is your state doing to help small businesses purchase insurance for their employees? Share your state’s work on your state’s page for this milestone on State Refor(u)m. To engage in a cross-state discussion about this milestone visit State Refor(u)m’s national discussion page.