Obamacare’s SHOP: Takin’ care of small business

Entrepreneur says SHOP Marketplace provided ‘great coverage’ for her employees (and helped prevent a medical catastrophe of her own)

When Mary Phillips Riddle and her husband, Wes Riddle, launched Roots Memphis Farm Academy in Memphis, Tenn., in 2012, it was just the two of them making their dream come true.

The couple worked multiple jobs to put food on their own table while they started up their non-profit organization, which trains the next generation of sustainable farmers. Their mission is to educate, train and launch these farmers, helping them start sustainable farms of their own.

Buying health insurance for themselves was a low priority back then. In the beginning, they got by with the help of a medical charity in Memphis that serves the working poor. But once they secured some funding and began hiring a staff in 2014, the Riddles knew that providing health insurance for their employees was the right thing to do.

“I can’t imagine not giving our employees insurance coverage,” Mary says. “We want to be an example of good ethics in our food system, so it wasn’t an option to say we wouldn’t take care of our employees’ basic needs. We want to treat our people well.”

Help for businesses with 50 or fewer employees

Enter the SHOP Marketplace. Established under the Affordable Care Act (ACA), the Small Business Health Options Program (SHOP) Marketplace is designed to help businesses with 50 employees or fewer provide health insurance everyone can afford.

mary-phillips-riddle

Mary Phillips Riddle, recovers after a lawnmower accident that amputated part of her foot.

Roots Memphis Farm Academy pays about $200 per month per employee for health insurance. They cover 100 percent of the premium cost for their employees, for what Mary considers “great coverage” – something she knows about first-hand.

A little over a year ago, Mary had a serious accident at work, catching her foot in a lawnmower and amputating part of her foot. Mary spent two and a half weeks in the hospital, where she was told she might never walk again. But she persevered through surgeries and physical therapy, and ran a half marathon six months after her accident.

Because of an administrative glitch, Mary got to see what her treatment might have cost her without insurance. The bill for her initial hospital stay alone was $150,000. That didn’t include surgeries, physical therapy, medication or any of the additional services she needed to recover from her injury. But thanks to her insurance, her total out-of-pocket costs came to about $7,000 – a far cry from the hundreds of thousands of dollars she would have had to pay on her own.

“A friend set up a GoFundMe account for me because $7,000 is a big chunk of change, but at least I didn’t have to give them my other foot to pay for my care,” Mary says with a laugh. “I don’t know what we would have done if we’d had to pay for everything ourselves – I would be declaring bankruptcy.”

A smart business move

The SHOP Marketplace helps small businesses put together a competitive benefits package, the kind that attracts and retains talented employees, something small businesses are figuring out. It seems to be a bit of a well-kept secret, though.

Although it’s unclear exactly how many small businesses have taken advantage of the SHOP Marketplace, Charles Gaba at ACASignups.net says an estimated 120,000 to 170,000 individuals are covered through the online SHOP Marketplace, with an unknown but possibly significant number enrolled outside the online marketplace.

Other than the fact that the SHOP Marketplace didn’t open until November 2014 — a year after it was originally scheduled to launch — it’s hard to say why more small businesses haven’t signed up so far. Like the rest of HealthCare.gov, it was called a failure by critics before it even fully rolled out, which may have discouraged some. But as awareness of the SHOP Marketplace grows, it’s likely that more small businesses will recognize its many benefits.

Businesses with fewer than 25 full-time employees that earn an average of about $50,000 a year or less can qualify for the Small Business Healthcare Tax Credit. By buying coverage through the SHOP Marketplace and using it to enroll employees, employers can save 50 percent of the cost of their premiums (up to 35 percent for tax-exempt employers) if they pay at least 50 percent of their employees’ premiums.

There are other cost savings for employers and employees, too, such as the opportunity to use pre-tax dollars to make premium payments.

What’s more, employers and/or employees in certain states may be eligible for additional premium assistance programs. The states currently offering programs are Alabama, Arizona, Georgia, Indiana, Kansas, Maine, Montana and Oklahoma.

The SHOP Marketplace lets small businesses decide how much to contribute to employees’ premiums, and whether or not to cover employees’ dependents. Businesses can offer a single plan to employees or let them choose from a number of different plans the employer selects.

Enrollment in the SHOP Marketplace is available year round, and businesses can get help with plan selection and enrollment at no additional cost through licensed agents and brokers that have completed the SHOP Marketplace agreement.

To learn more, visit HealthCare.gov/small-businesses.

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