Comparatively speaking, the Affordable Care Act’s impact on small employers has received less attention than its impact on individuals or large employers. That may be because a small employer’s opportunity to select a health plan in the private market for its employees is still very much intact, just as it was prior to the health law’s passage.
This fact should not diminish the transformation that’s just beginning in the small employer market. When it comes to helping employees find quality health insurance coverage, small businesses today have more options than before.
That is in large part due to the “tax credit safety net” that now exists in the United States. While controversial, tax credits have enabled some employers to make the decision to end health benefits for employees. If employees are lower income, it stands to reason that they have access to tax credits to make non-group health insurance more affordable. And in this scenario, employees have the freedom to choose their own plans which are guaranteed under the law to be available to them, and all of which include coverage for essential health benefits.
There is also the Small Business Health Options Program, or SHOP, which is a hybrid between traditional insurance and ending benefits altogether. With SHOP, employers have the opportunity to provide a tax deductible group health benefit to employees while still giving employees a choice among health plans and networks. Buying SHOP is also the only way small businesses could access tax credits aimed at small employers to encourage them to offer benefits.
All options come with opportunities and pitfalls, whether a business sticks with traditional insurance, opts for SHOP coverage or ends coverage sending employees to the federal Marketplace. The right fit really depends on your nonprofit’s financial, cultural and labor market needs, as well as your appetite for change. There is information you may not currently have that will help you decide what’s right.
Our mission is to change the health insurance experience through open dialogue, powerful advocacy and the delivery of trusted and understandable information. We’re here to help you think about your priorities and your options and find the fit that’s right for your organization.