SHOP for Small Businesses - Question . .

[cadylou]

I'm not sure if this has been addressed by anyone or not (so forgive me if I missed it), but I have combed through all of the information on the SHOP and it makes it sound as if when the employee applies, they still may be eligible for subsidies. . . .

When you go in & run a quick calculator (not very good - only breaks ages at under 50 or over 50), a screen comes up with the associated income levels and a blurb about how some people may save $$. I don't get it.

Is it just me? If someone can clarify this, I'd appreciate it. I thought if they employer was contributing, the eligibility for subsidy didn't exist anymore.

Thanks in advance.

 

[Yagents]

1. SHOP = small business group plans
2. Tax Credits in shop go to employer
3. employee gets nothing, and is ineligible to get tax credits on private exchange if affordable/creditable.

 

[cadylou]

Ok, that's what I thought - but when you read what they have out there, it's not clear at all (big surprise . . . .). Thanks for the confirmation.

 

[Zane Benefits]

Yes, confirmed on what Yagents said as well.

For small businesses, the tax credits in the SHOP are just for the employer (if eligible...). And, small businesses now have to go to the SHOP to get the small business tax credits (this is a change in 2014).

Compared to the tax subsidies on the individual health insurance exchange, the SHOP tax credits may be a joke. Many small employers -- especially with lower income workers -- see this and are opting to have employees shop on the individual market (through a broker or the exchange) and then provide a health insurance allowance ("pure defined contribution") to help with their individual premiums.