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How Trumpcare Will Affect Your Small Business’s Health Care Options

Georgia McIntyre

Georgia McIntyre

Finance Writer at Fundera
Georgia McIntyre is the resident Finance Writer at Fundera. She specializes in all things small business finance, from lending to accounting. Questions for Georgia? Comment below!
Georgia McIntyre

On May 3rd, 2017, the U.S. House of Representatives passed the American Health Care Act—repealing and replacing the Affordable Care Act, commonly known as Obamacare.

Trumpcare—as the new legislation has come to be called—is still under works. It’s unclear which aspects of the Affordable Care Act will be kept and which will be nixed as the American Health Care legislation is developed.

However, it is certain that there’s a lot of change ahead for citizens and small business owners alike.

If you’re a small business owner, how will your health care enrollment be affected? Here’s what you need to know.

Small Business Health Care Enrollment Plans: How It Stands Today

What does small business health care enrollment look like without the recent shakeup of the Affordable Care Act?

Before May 15th—when the Center for Medicare and Medicare Services (CMS) announced a (potential) major change in small business health care enrollment—small business owners could elect to provide health and dental insurance to their employees through the Small Business Health Options Programs (SHOP) Marketplace.

To access this marketplace, eligible small business owners must run a business or nonprofit with 50 or fewer full-time equivalent employees.

In theory, using the SHOP marketplace to provide health care makes a lot of sense for small business owners. You’ll not only have access to high-quality health care plans, but you can also choose how much you want to offer and how much you want to contribute toward your employees’ plans. And employees can choose which plans they want.

Everything can be done online, with an independent agent or with a SHOP-registered agent, or totally by yourself. And if you run a business with fewer than 25 employees, you could qualify for the Small Business Health Care Tax Credit (worth up to 50% of your premium costs).

While the SHOP marketplace seems like an initiative that small business owners looking to provide health care for their employees would be eager to take advantage of, the program goes largely unused—according to the Trump administration, fewer than 40,000 small business workers are enrolled under HealthCare.gov SHOP plans.

That’s why top Trump health advisors are moving toward ending the SHOP marketplace in 2018.

Small Business Health Care Enrollment Plans: How They’ll Look in the Future

What does the Trump administration’s and the CMS’s cut of the SHOP marketplace mean for how you’ll provide health and dental insurance coverage to your small business’s employees?

Well, you shouldn’t need to brace yourself for a major change.

Most likely, your options for small business employee health care coverage will be more limited (if you choose to pursue the federally sponsored health care route).

Here’s what the new proposal entails:

Small business owners would no longer be able to enroll in SHOP plans through the federally run SHOP exchange (in the 33 states where the exchange is currently available).

Effectively, the new initiative removes the SHOP marketplace from the HealthCare.gov portal.

However, you can still access and enroll in SHOP health and dental insurance plans, just not through the portal. And to do so, you’d have to access them from an independent broker, agent, or insurer of your choice (effective on January 1st, 2018).

And even though the SHOP marketplace will be removed from the HealthCare.gov portal, small business owners could still access that Small Business Health Care Tax Credit and use the portal to check to see if they’re eligible for the credit.

How Will This Change Affect Small Business Owners?

According to the CMS administrator, Seema Verma, the goal of the new plan is to “reduce [Affordable Care Act] burdens on consumers and small businesses and to make it easier for them to purchase coverage.”

In effect, the move to do away with the SHOP marketplace is all about bringing efficiency back into the picture—giving small business owners more enrollment options.

However, it’s unclear what real effect this change will have once implemented. There’s even worry that cutting the SHOP marketplace—leaving small business owners to turn to independent agents and brokers to find access to these federal programs—will limit small business owners’ health and dental care options in the long run.

According to Timothy Post, a professor at the Washington and Lee University School of Law, nixing the SHOP marketplace on the federal HealthCare.gov portal won’t give small business owners more options.

“Small employers have always had the option of enrolling directly with insurers or through agents or brokers,” says Post. Post argues that because the primary purpose of SHOP was to open up more health care coverage options for business owners, removing the federally run SHOP marketplace makes it “more likely that the choices available to employees of small businesses will be limited to a single plan or to a few plans offered by a single insurer.”

***

Small business owners could have fewer health care options easily laid out in front of them without the federally run SHOP marketplace.

However, with most small business owners providing health care coverage via independent brokers and agents anyway, it’s unclear what the real effect of this initiative will be. In the end, the SHOP cut could be more of a symbolic gesture of the start of many Obamacare rollbacks.

But as a small business owner looking to stay in the know, keep your eyes peeled for changes that will affect both your and your employees’ health care plans!

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
Georgia McIntyre

Georgia McIntyre

Finance Writer at Fundera
Georgia McIntyre is the resident Finance Writer at Fundera. She specializes in all things small business finance, from lending to accounting. Questions for Georgia? Comment below!
Georgia McIntyre

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