Affordable Care Act changes affect small businesses

By Cathy Johnson / Guest Editorial

It was recently announced that the Small Business Health Options Program, known as the SHOP Marketplace, will not offer online enrollment until November 2014, a one-year delay from a launch that was initially planned for this past October. The federal delay affects the 36 states where the federal government is running the health insurance exchange (including Iowa). It does not change the small business options in the 14 states and the District of Columbia that are running their own exchanges.

Small businesses will still have the option to purchase SHOP health insurance plans through an insurance broker or agent, who will assist with filing a paper application. With this new delay, small businesses will likely see little change in the way health insurance is purchased until 2015.

However, small business owners will need to purchase one of the plans sold on the SHOP Marketplace, through an insurance broker or agent, to be eligible for the health care tax credit available to employers with fewer than 25 employees. This tax credit first became available in 2010, regardless of where a company purchased coverage. Beginning in 2014, companies will need to buy a SHOP Marketplace plan to continue receiving that financial assistance, worth as much as 50 percent of their workers’ premiums. In years past, the tax credit was capped at 35 percent of workers’ premiums.



Cathy Johnson is chief administrative officer and CFO at Terry Lockridge & Dunn/World Trend Financial.