In lieu of the Affordable Care Act, insurance professionals are starting to get their first look at officially released information from the New York State Department of Financial Services with regards to small businesses seeking to obtain affordable health coverage through the NY Health Benefits Exchange.
What Is The NYHBE SHOP?
The NY Health Benefits Exchange, Small Business Health Options Program (SHOP) is a web-based portal that will act as a marketplace offering a variety of health plans for small business owners to compare, choose, and purchase insurance for their employees. Once a plan is selected, the employer and employees will be able to enroll in the chosen plan through the SHOP Exchange. The employer will also be able to pay the monthly premiums directly through the SHOP Exchange. Key points:
-Small employers can enroll themselves through the exchange
-Small employers can seek assistance from state employees (known as “Navigators”) to help them enroll in the exchange. Navigators cannot provide plan recommendations however, as they are not licensed insurance Producers
-Just like securing coverage outside of the exchange (as it is today), small employers can utilize certified SHOP insurance Producers (or “Brokers”) to help them decide on the right plan for the business, as well as assisting them enroll into the NYHBE. Certified Producers will appear in a Producer Directory on the NYHBE SHOP web portal
-Small employers will still be able to purchase a health plan directly from commercial insurance companies outside of the NYHBE. All communications and transactions take place between the small business and the insurance company of choice with or without the assistance of a broker
Small Business Federal Tax Credits
Small businesses owners offering insurance to employees through (and only through) the SHOP may be eligible for federal tax credits. These tax credits will give small business owners incentive to offer health insurance coverage to their employees. The small business tax credit is only available for small businesses through the SHOP, and will only be available for 2 years until 2016. Eligibility is as follows:
-Small employers must cover at least 50% of the premium of their employee health care coverage based on a single rate
-Small employers must have 25 or fewer FTE’s
-Small employers must have an employee average annual wage below $50,000
-A SHOP web portal tax credit calculator will be available to small employers and Producers. This will make the process easier in determining tax credit eligibility. However, it is strongly recommended that small employers seek the council of their CPA to properly determine their eligibility
Key Information and Timelines
-Open enrollment of the SHOP Exchange begins on 10/1/2013
-Coverage obtained through the SHOP Exchange begins on 1/1/2014
-Small employers are those businesses with 50 or fewer full time employees (FTE’s = 30 hours or more per week as of 1/1/14)
-Small employers will not be required to offer health insurance to their employees
-Small employers will not be required to contribute towards the premium of their employee’s health insurance
-Individuals will be required to obtain health insurance or be subject to a tax penalty beginning January 1, 2014
This information has been provided by the NYS Department of Financial Services and the NY Health Benefits Exchange. More information about the program will provided as it is received from the state of New York.
*Disclaimer* This content is provided solely for informational purposes. It is not intended as, and does not constitute, legal or compliance advice. The information herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax, and/or other professional advisors.