SHOP Exchange Shortcomings Limit Small Business Insurance Options

For businesses with under 50 employees, the options for offering employer-sponsored health insurance is very limited and can be quite costly. Although the federal government doesn’t require companies with less than 50 employees to offer insurance right now, many employers feel compelled to provide that benefit in order to remain competitive in the market. Companies resort to offering group health insurance plans, which tend to be expensive for both employers and their staff.

The Small Business Health Options Program, or SHOP, was created by the ACA in an effort to provide other, more affordable options for small companies to offer employees. Unfortunately, this program has faced many obstacles and shortcomings, such as technological problems, limited coverage options and unclear tax credit policies.

According to the blog ACASignups.net, there are currently 72,000 SHOP plan participants. The government expects over 2 million will enroll in the SHOP exchanges by the end of 2015. However, experts believe that final numbers will not be close to that estimate due to ongoing issues with the program.

So with the SHOP program not seeming like a realistic option for small businesses, is there only choice to go with private health insurance plans?

A new trend appears to be on the rise demonstrating the savviness of small business owners. Instead of enrolling in a costly group plan, some companies are offering their employees a “raise” that would cover expenses if they were to enroll in individual plans.

Not only does this save the company money in the long run, but it might end up costing individuals less, especially if they qualify for tax subsidies. This option would only be available for businesses with under 50 employees, since they are not legally required to offer health insurance.

Do you think this is a smart move by small businesses? Share with us your thoughts below!

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