Information for Small Businesses

Small Group Market
The small group market for health insurance coverage includes small employers with 2-50 employees.  Individuals that are self-employed or have no employees are generally not able to purchase coverage in the small group market, but may access coverage in the individual market.
 

Coverage Options for Small Businesses

Small businesses have the option of purchasing coverage in the private marketplace or through the small group health insurance exchange called the Small Business Health Options Program or "SHOP."

Private Market:

 In the private market, businesses purchase health insurance just as they always have - typically, coverage is purchased through an agent, but it can also be purchased directly from a small group health insurance issuer.  The contact information for every health insurance issuer currently writing small group coverage is available by clicking here.

SHOP:

The Small Business Health Options Program (SHOP) is the name of the small group health insurance exchange that the federal government established in South Carolina. Small employers that purchase health insurance through SHOP may be eligible for federal tax credits under federal eligibility criteria. 

For more information, please visit: 

healthcare.gov/small-businesses
or call the SHOP call center at (800) 706-7893, available Monday through Friday from 9 a.m. to 7 p.m.


Federal Tax Credits for Small Businesses

If you (1) have fewer than 25 full-time equivalent employees; (2) pay employees an average annual wage that's less than $50,000; and (3) pay at least half of your employees' health insurance premiums, you may qualify for a federal tax credit to offset the cost of your insurance.

The Health Care Tax Credit for small businesses has been available since 2010.  Beginning in 2014, the federal tax credit was increased from a maximum of 35% to up to 50% of your contribution toward employees' premium costs (up to 35% for tax-exempt employers).  However, the enhanced tax credit is only available for small employers that purchase coverage through the SHOP.

Visit the SHOP website's Tax Credit Estimator to find out the amount of the tax credit your small business may qualify for.

Employer Shared Responsibility Provisions
(also known as "Employer Mandate")

 The Affordable Care Act includes a penalty that is imposed on certain  employers if they don't provide health insurance coverage to employees and   their dependents.  This is officially entitled the Employer Shared   Responsibility Payment, but is sometimes referred to as the employer   mandate.  

 "Beginning in 2015, those employers with 100 or more full-time or full-time   equivalent employees who do not offer affordable health insurance that   provides minimum value to their full-time employees (and dependents) may   be required to pay an assessment if at least one of their full-time employees   is certified to receive a Premium Tax Credit in the individual Health   Insurance Marketplace.  Under these rules, a full-time employee is one who   is employed an average of at least 30 hours per week. For employers with   50-99 full time/full-time equivalent employees, these rules will not apply   until 2016 provided employers of this size meet certain certification   requirements." (Source: SBA.Gov)  

Additional Resources


  • Questions & Answers: Employer Shared Responsibility Provisions Under the ACA (IRS)
  • Final Regulation: Shared Responsibility for Employers Regarding Health Coverage (IRS and U.S. Department of Treasury, Feb. 10, 2014)
  • Definitions and Employer Size Determinations: The U.S. Small Business Administration has prepared information to assist employers in determining the number of full-time or full-time equivalent employees.
The Kaiser Family Foundation has prepared the following flow chart to illustrate how these requirements work (available online here).
ACA Employer Penalties Flowchart

Resources for Small Businesses

See below for links to additional resources for small businesses.