What is a Small Business Health Options Program (SHOP)?

Sorting out health insurance for your team can feel like trying to solve a puzzle with missing pieces. The terms are confusing, the choices are endless, and it’s easy to second-guess every decision. Even seasoned business owners feel lost in the process. But here’s the good news: this doesn’t have to be complicated.

This article is your straightforward introduction to the Small Business Health Options Program, also known as SHOP. You’ll learn what SHOP is, how it works, and how to decide if it’s the right fit for your team.  

What is the SHOP marketplace? 

Traditional group health plans are often hard to navigate. SHOP was created to make the process easier for small employers. It’s an online marketplace made just for businesses like yours. 

Here’s what makes SHOP different: 

• Simple comparison shopping: You can view health and dental plans from multiple insurers in one place 
• Budget control: You choose how much to contribute toward your team’s premiums, and SHOP does the math 
• One platform: Select plans, handle enrollment, and manage everything from one online dashboard 

SHOP is designed to give small businesses more options, better control, and less paperwork. 

Why offer health insurance through SHOP? 

Offering health insurance shows your team you’re invested in their well-being. It also comes with practical benefits for your business. 

• Tailored plans: You get access to health and dental plans built with small businesses in mind 
• Hiring advantage: Competitive benefits help you attract and keep quality employees 
• Flexibility: You choose how much to contribute and whether to offer coverage for dependents 
• Simplified management: Everything is handled in one system, which saves time and cuts back on paperwork 

Remember, health insurance is not just a perk. It’s a tool for growth and long-term stability. 

Am I eligible for SHOP? 

Most small businesses qualify for SHOP. The requirements are clear and straightforward. 

• Team size: You need between one and 50 full-time equivalent employees. Some states allow up to 100. 
• Employee participation: A majority of your eligible employees must enroll. Some exceptions apply during special windows. 
• Location: Your business must operate in a state that offers SHOP coverage 

If you have at least one full-time employee who isn’t you, your spouse, or another owner, you’re likely eligible. 

How do I set up health insurance for my team using SHOP? 

Getting started with SHOP is simple. Here’s a step-by-step outline: 

1. Pick your plan tier 
   Plans come in Bronze, Silver, Gold, and Platinum. Bronze has the lowest premiums and highest out-of-pocket costs. Platinum is the opposite. Most small businesses choose Silver or Gold. 
2. Set your contribution 
   Decide how much of the monthly premium you will pay. 
3. Choose dependent coverage 
   You can cover just your employees or include their families. The choice is yours. 

This flexibility lets you create a plan that fits your business and your team’s needs. The process to enroll is straightforward and doesn’t take much time. Here’s a checklist: 

1. Register your business on your state or national SHOP website. 
2. Submit basic details like your EIN and number of employees. 
3. Get verified so SHOP can confirm you’re eligible. 
4. Pick your plans and set up your contribution levels. 
5. Invite your team to enroll. You can track their progress in real time. 

Prefer help? You can work with a licensed broker or agent for free. They’ll walk you through the process, answer questions, and help you stay on track without pushing products you don’t need. 

Can I get financial help with SHOP? 

You might qualify for the Small Business Health Care Tax Credit. Many owners don’t know this is available. 

Eligibility Requirements: 

• fewer than 25 full-time equivalent employees 
• pay average wages under $63,000 
• pay at least half the premiums 
• buy coverage through SHOP 

You can receive the credit for up to two years and it can reimburse up to 50 percent of your contribution. Nonprofits can receive up to 35 percent. 

Example: If you contribute $20,000 toward employee premiums, you could get up to $10,000 back through the credit. 

The Bottom Line 

SHOP is built for small businesses. It simplifies enrollment, gives you control over costs, and opens the door to tax savings. If you want to offer strong benefits without adding complexity, SHOP could be a great option. And with help available at every step, it’s easier to set up than you might think. 

Want help making sense of the options? Schedule a consultation with DiMercurio Advisors. We’ll walk you through it step by step and help you make the right call for your business.