Small Groups, Business and Non Profit
Small businesses and nonprofits that either have a small group plan (50 or less eligible employees) or would like to create small group plan can use Covered California’s Small Business Health Options Program (SHOP). There is no requirement for small businesses to offer health insurance to their employees. A small business with an existing small group plan can dissolve it and let the employees purchase individual and family insurance through either Covered California, where they might be eligible for a subsidy, or an independent health insurance agent. There are no penalties levied on small business for not offering health insurance.
Small group eligibility
- Small businesses with less than 50 full time equivalent employees are eligible to participate in SHOP
- Small businesses with 25 or fewer full time equivalent employees are eligible for tax credits on the employer contribution to the employee’s health insurance premium.
- Non profits and small business with 10 or fewer full time equivalent employees with annual wages of less than $25,000 are eligible for the maximum tax credits.
- Employers participating in SHOP will select a specific metal level of plans to offer to employees: Bronze, Silver, Gold or Platinum.
- Employees will be able to select from any of the insurance carriers offering plans with in that metal level. One employee may choose a HMO plan while another employee may select a PPO plan that has entirely different doctors and hospitals.
- Small businesses are eligible for tax credits when they contribute at least 50% to the employee only health insurance premium (there is no requirement to contribute to dependent coverage).
- Employees will be able to add dental and vision benefits at the time of enrollment.
- Small business employers can continue with their existing small group health insurance plans and make no changes.
Dental, vision, life, disability and other ancillary products can be purchased separately for the group and will not be offered through Covered California.
Group Health Plan Employee Notification under the ACA
Small Business Tax Credits for Employer Contributions
This is a nice over view of the new IRS regulations covering the requirements small employers must meet in order to receive a tax credit for employer contributions to employee health insurance, from Gallina LLP, CPA, Sacramento. IRS Fine Tunes the Small Employer Tax Credit for Healthcare Costs
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