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EMPLOYEE GROUP HEALTH 101
A group health insurance plan helps your business (you and your employees) pay for health care expenses. Businesses with one or more employees are eligible to purchase group health insurance. Group health insurance plans are designed to be more cost-effective for businesses. Employee premiums are typically less expensive than those for an individual health plan. Because insurance premiums are paid with pre-tax dollars, it helps employees pay less in annual taxes. Employers pay lower payroll taxes and can deduct their annual contributions when calculating income taxes.
AFFORDABLE CARE ACT (ACA) MARKETPLACE GROUP PLAN (SHOP)
The Small Business Health Options Program (SHOP) helps small businesses with 1–50 employees provide private insurance to their employees. It’s also generally the only way to access the Small Business Health Care Tax Credit, which can save eligible employers up to 50% of their employer contribution. You can enroll in SHOP plans through an insurance company or with the help of a SHOP-registered agent or broker. This may be different than how you may have enrolled in SHOP in the past. Specific enrollment steps may vary by the insurance company, but see the next page for some guidelines to help you with the enrollment process.
THE SMALL BUSINESS HEALTH CARE TAX CREDIT
You may qualify for the Small Business Health Care Tax Credit that could be worth up to 50% of the costs you pay for your employees' premiums (35% for non-profit employers).
Enrolling in a Small Business Health Options Program (SHOP) plan is generally the only way for a small business or non-profit to claim the Small Business Health Care Tax Credit. To qualify for the tax credit, all of the following must apply:
You have fewer than 25 full-time equivalents (FTE), employees
Your average employee salary is about $50,000 per year or less
You pay at least 50% of your full-time employees' premium costs
You offer SHOP coverage to all of your full-time employees. (You don't have to offer it to dependents or employees working fewer than 30 hours per week to qualify for the tax credit.)
SMALL BUSINESS SIMPLIFIED FUNDING OPTION WITH STOP LOSS
Simplified Funding Option Plans offers a different way for businesses to provide health insurance benefits. The complexity of new healthcare laws and their potential to raise insurance rates may leave some employers looking for an alternative to fully insured plans.
The Affordable Care Act (ACA), also known as Obamacare, requires fully insured employer group plans to cover essential health benefits (EHB) as defined by the legislation. The law also puts certain rating restrictions on employer group insurance, which, along with the requirements for EHB, could increase the total cost of providing health insurance to employees. The program to cover your employees under a self-funded health benefit plan coordinated with stop-loss insurance protection.
The self-funded plan provides the required coverage to meet the ACA’s mandate. Governed by federal law under the Employee Retirement Income Security Act (ERISA), self-funded plans allow employers more
generous latitude in designing coverage. From the options available, you can select the plan that best meets your employees’ needs. Your single monthly payment is applied to the claims account, plan administrative expenses, and stop-loss insurance premium.
Claims account Funds are deposited into an account set up expressly for the group’s covered medical claims. The amount deposited is based on the anticipated medical claims for the group.
Administration Plan administrative expenses, such as billing, customer service, and claims payment, are also included as part of the monthly payment.
Stop-Loss Insurance: includes employer stop-loss coverage.
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