It’s Open Enrollment for the Affordable Care Act’s (ACA) marketplaces, and in most states, December 15 is the deadline to enroll in a plan that begins on January 1, 2023. The marketplaces are essential supply of medical insurance for small companies, together with small enterprise house owners, sole proprietors, and employees. This week, we spotlight FAQs from our Navigator Resource Guide for small enterprise house owners and their staff.
My employer simply advised us we’re enrolling in “SHOP” protection. What is SHOP protection?
The SHOP market is the place small employers might buy group plans for his or her staff. There could also be federal tax credit accessible to assist the employer pay for workers’ protection. The willpower for the tax credit score takes into consideration the scale of the employer and common worker salaries. The SHOP additionally ensures that collaborating small group well being plans have been licensed to satisfy minimal requirements for the adequacy and high quality of protection. All plans additionally should cowl the same set of advantages, and every plan will likely be assigned to a steel stage of protection – bronze, silver, gold, or platinum – that displays how a lot safety towards cost-sharing the plan offers to the typical enrollee. Bronze plans expose the typical client to the best quantity of cost-sharing, whereas platinum plans present probably the most safety. Bronze plans will are likely to have decrease month-to-month premiums, whereas the premiums for platinum plans will likely be dearer.
On the SHOP web site, relying in your state, it is possible for you to to discover a SHOP-registered agent or dealer to help you with selecting the best plan or you possibly can enroll instantly with an insurance coverage firm. Under some state-based SHOP marketplaces, you might be able to choose and enroll in a well being plan. 45 C.F.R. § 155.700 et. seq.; CMS, The Future of the SHOP: CMS Intends to Allow Small Businesses in SHOPs utilizing HealthCare.gov More Flexibility when Enrolling in Healthcare Coverage, May 15, 2017).
I’m a small enterprise proprietor. Can I qualify for a tax credit score to purchase insurance coverage?
The small enterprise tax credit score is usually solely accessible with SHOP protection, which you should purchase by way of an agent, dealer or medical insurance firm or instantly by way of some state-based marketplaces. However, small companies with a principal tackle in a county with no SHOP plans accessible can declare the small enterprise tax credit score by providing qualifying medical insurance protection that meets sure federal necessities (see right here for extra data).
To qualify for a small enterprise medical insurance tax credit score, it’s essential to cowl a minimum of 50 p.c of premiums on your staff (not together with dependents) and have fewer than 25 full-time staff whose common annual wages are lower than $56,000 in tax 12 months 2020. Eligible employers can solely declare the tax credit score for 2 consecutive years. Employers who usually are not tax-exempt are eligible for a better tax credit score than employers who’re tax-exempt. For extra data on the right way to calculate eligibility for and the quantity of the small enterprise well being care tax credit score, see this reference from the Internal Revenue Service. Small companies can declare the credit score in your annual revenue tax return, utilizing Form 8941. Tax-exempt employers can declare the tax credit score as a refundable credit score by submitting Form 990-T with an connected Form 8491. (IRS, Small Business Health Care Tax Credit and the SHOP Marketplace; IRS, 2021 Instructions for Form 8941).
I personal my very own enterprise and don’t have any staff, what are my choices?
While you aren’t eligible to buy small group medical insurance or SHOP protection in most states, you should purchase particular person market protection and might be able to qualify for monetary help by way of the medical insurance market for people. Note, nevertheless, that some states might permit you to buy small group medical insurance as a “sole proprietor.”
To discover out in case your state permits enterprise house owners with no staff to enroll in small group protection, verify along with your state’s insurance coverage division
(42 U.S.C. § 18024; 45 C.F.R. § 144.03 (definition of “small employer”)).
I work full time for a small enterprise (fewer than 50 staff). Does my employer have to supply me well being advantages?
No, small companies usually are not required to supply well being advantages to both full-time or part-time staff, or to their dependents. Small companies usually are not topic to tax penalties once they don’t supply well being advantages. If your small employer doesn’t supply well being advantages, you (and your loved ones) can apply for protection within the market and you’ll apply for premium tax credit which will scale back the price of protection within the market. Subsidies are calculated based mostly on the value of obtainable plans and family revenue; decrease revenue people are eligible for better subsidy quantities. Some larger revenue people might not obtain subsidies. (26 C.F.R. § 1.36B-2).
Stay tuned for extra FAQs all through the open enrollment interval, and take a look at our Navigator Resource Guide for over 300 FAQs and different enrollment assets.