Suppose you purchase a health plan for your employees through the SHOP (Small Business Health Options Program) marketplace. In that case, you qualify for a premium tax credit equal to 5 percent of your premium contributions.
Two new tools are now available on online government portals to help small businesses understand and take full advantage of the SHOP’s benefits. The new FTE (Full-Time Equivalent) calculator helps employers determine whether they can buy SHOP coverage for their employees. And the new SHOP Tax Credit Estimator helps employers determine the size of the tax credit they may receive for contributing to SHOP coverage for their employees.
Points to ponder when you apply for a tax credit
The following are some key points to remember when applying for the tax credit and SHOP:
- Employers with less than 25 FTEs (full-time equivalent employees) may be eligible for the Small Business Healthcare Tax Credit, worth 50 percent of employer cost-sharing if their workers earn $50,000 or less per year on average.
- The tax credit will be available to qualifying employers for two consecutive tax years.
- The tax credit will be available to qualifying tax-exempt employers who can receive approximately 35 percent of their employer cost contributions as a reimbursement.
- Typically, qualifying employers who purchase SHOP health plans are eligible for the Small Business Healthcare Tax Credit.
- Small employers who don’t qualify for a small business tax credit may also get approved for SHOP coverage.
- You can find more information about premium tax credits here.
Apply for SHOP coverage at any time of year
SHOP coverage is available to employers with 50 or fewer FTEs (full-time equivalent employees), and enrollment is open throughout the year.
If your state has its SHOP marketplace, visit your state agency website to learn how to calculate FTEs.
Choose your state, and we’ll guide you through the process. If you have any concerns about the SHOP coverage, please call +1 855-913-1570 (TTY: 1-800-855-0511) Monday through Friday, 9 am to 7 pm. This number is also appropriate for agents and brokers.