Small Business Health Options Program (SHOP)

We’re all familiar with health care exchanges that allow individuals to buy subsidized and standardized health insurance plans. But did you know that those same exchanges offer small business health insurance? Rather than introducing subsidies, state exchanges offer small employer health care plans with tax credits through a program call SHOP. Worried whether you can afford insurance for your small business? SHOP credits may be a great option for your business.

What is SHOP insurance?

SHOP stands for Small Business Health Options Program and it’s a great way to offer quality and affordable health insurance to your employees. SHOP coverage is generally available to small businesses with 1-50 full-time equivalent employees (FTEs), but in some states businesses with up to 100 full-time equivalent employees may qualify.

If you have fewer than 25 employees, you may qualify for a Small Business Health Care Tax Credit worth up to 50% of premium costs (specifically up to 35% for tax exempt/non-profit employers). That’s a lot of savings! You’ll still be able to deduct the rest of your premium costs not covered by the tax credit.

How do I find out if my business qualifies for SHOP coverage?

Since SHOP coverage is offered at the state level, eligibility differs by state. Each state will require a variation on the number of FTEs, average annual salary, whether or not you offer insurance to all FTEs, and how much of the employee premium you contribute.

The best way to determine these details is to see if your state has its own exchange for small businesses (opens in new tab). Most sites will provide an eligibility checklist or calculator to help you see if you qualify.

If you’re based in New York, read our guide on qualifying and applying for SHOP.