The Small Business Health Options Program (SHOP) is a marketplace for employers and employees to purchase group health insurance if they qualify for small business tax credits. Eligible employers must employ fewer than 25 full time equivalent employees, pay average annual wages of less than $50,000 per year, and pay at least 50% of employee premiums. In addition, 70% of all eligible employees must enroll in the health plan unless they are considered an eligible waiver (i.e. are insured through their spouses employer based coverage).
Beginning January 1st, 2014, maximum tax credits increased to 50% of premiums paid for small business employers and 35% of premiums paid for eligible tax exempt and non-profit small business employers. To be eligible for tax credits employers must purchase small group coverage through the SHOP at Covered California.
To check eligibility for this program check out the Small Business Tax Credit Calculator.
Tax credits work on a sliding scale. The smaller your business or non-profit, the larger tax credit you will receive. Small employers with less than 10 employees and average annual wages of less than $25,000 will qualify for the largest tax credits. We encourage you to check with your tax professional for further information regarding tax credits.
At no cost to you or your employees, J.C. Lewis Insurance will assist you in determining your eligibility, setting up your SHOP health plan, and your annual renewals. In addition your employees may use our agency as a resource for all of their health insurance related questions and needs.
How do I apply for a SHOP health plan?
Employers must complete the SHOP employer application. Employees must complete 1 SHOP employee application per employee. All documentation must be submitted to J.C. Lewis Insurance Services for review.
What information is required in addition to the employer and employee applications?
Depending on the type of business we may require a California Business License, Partnership Agreement, Articles of Incorporation, Statement of Information, or Fictitious Business Name Filing. In addition we will require a reconciled DE-9C and possibly a Schedule C or Schedule K-1 (if the employer is not listed on the DE-9C).
Is there a deadline to apply for coverage?
Unlike individuals and families, small businesses do not have an open enrollment period within the SHOP and may apply for coverage throughout the year. However, there is a deadline for desired effective dates. All enrollment materials must be received by SHOP no later than 5 business days prior to the first of the month following the desired effective date. Premium payments must be made by check and received by SHOP no later than your effective date.