Alternatives to SHOP for Small Business Health Insurance Needs

Alternatives to SHOP for Small Business Health Insurance Needs

May 29 2015

The Small Business Health Options Program (SHOP) marketplace rolled out in 2013, alongside the individual marketplace.

However, its introduction to the small business health insurance market was turbulent with continued delays of the promised ‘employee choice’ feature and little buzz around its launch – leaving business owners confused about the process.

‘Small’ group is defined as having up to 100 full-time or full-time equivalent employees.

If you are still trying to determine the best way to obtain health insurance coverage for your small business then the following might provide some clarification. Starting with the truth that in 2016, ‘small’ group is defined as having up to 100 full-time or full-time equivalent employees. This is different from 2014 and 2015.

If you have purchased your health plan through the SHOP marketplace and have been claiming the Small Business Health care credit since 2014, then you may decide to use a different purchasing method this year. According to IRS rules, “employers can only claim the tax credit for no more than two-consecutive taxable years, beginning with the first taxable year in or after 2014.”

Aside from the SHOP marketplace, here are three great alternatives a small business can use to secure coverage for its employees:

  • Buy directly from an insurance carrier.

You can work directly with the company’s representative to walk through the full scope of their health insurance options and find the right fit.

Some health insurance companies offer value-add options, on top of its health coverage. By the close communication fostered through a direct relationship, you will be fully aware of these additional offerings and ensure your employees take advantage of them.

Another added benefit to buying direct is you can enroll , pay invoices and manage your benefits all in one place.

  1. Contact a licensed insurance agent.

Agents are experts in helping employers find the right health plan to meet their business and personal needs. They also reduce the amount of legwork and research you have to do.

They can cut through the confusion and point you to carriers that offer competitive options. Beyond that,  they can recommend the carriers that provide additional member benefits that would be of value to your employees.

Agents are trained to find employers unique value-adds that fit their needs.

  1. Buy through a private multi-carrier online exchange.

The SHOP is not the only online marketplace available to small employers.

There are private multi-carrier and multi-distributor benefits exchanges for mid-sized and small employers.

In Michigan, iSelect Custom Benefits Store is a fully insured health benefits exchange, essentially a storefront for group benefits. It allows employees to take control of their health care coverage decision by using a set amount of money provided by their employer, known as a  ‘defined contribution,’ to choose their own health plan. Employees select the specific benefits they need – from health care, including medical, dental and vision, to disability and life insurance.