When are Small Businesses Eligible for SHOP Coverage?
Question: We’re a small employer and would like to make health coverage available to our employees through the Small Business Health Options Program (SHOP). Is there a specific time of the year when we must sign up for this coverage?
Answer: No, a SHOP must permit a qualified employer to buy coverage for its employees at any point during the year. This is often referred to as “rolling enrollment.”
Under the Affordable Care Act, SHOPs are intended to allow eligible small businesses to offer employees a variety of qualified health plans — giving the company and its employees more bargaining power, a bigger risk pool and more choices. For SHOP purposes, a small employer has had at least one and not more than 50 employees on business days in the preceding calendar year. (There is an option for states to expand the cutoff to 100 employees.) A SHOP is required to operate in each state. If a state hasn’t established one, the federal government operates a federally facilitated program for small employers in that state.
Under a SHOP’s rolling enrollment, the employer’s plan year is the 12-month period beginning with the plan’s effective date of coverage. But keep in mind that SHOPs may apply a minimum participation requirement, except during an annual open enrollment period from November 15 through December 15 of each year. In most states, this means that at least 70% of employees must accept the offer of SHOP coverage (or be enrolled in other qualifying health coverage) in order for the employer to participate in the program.
Thus, while your company may sign up for SHOP coverage at any time during the year, you must satisfy the minimum participation requirement unless it’s an annual open enrollment period. A calculator is available at healthcare.gov/small-businesses/shop-calculators-mpr to help employers predict whether they’ll meet the minimum participation SHOP enrollment requirement.
If you have questions about SHOP coverage, please contact Ron Present, Partner and Health Care Industry Group Leader, at firstname.lastname@example.org or 314.983.1358.