This post is part of Priori’s new blog series “From Our Network,” where we feature lawyers in our network discussing important issues small businesses face. After every post, we give our readers a chance to ask the lawyer questions, and the lawyer picks 1-2 to answer. In today’s post, healthcare lawyer Kenneth Rashbaum answers reader questions about how they take advantage of the Affordable Care Act to help their businesses today.
So, as a small business who wants to take advantage of SHOP now, what are the next steps - talk to my accountant and talk to a broker? Are there any potential pitfalls to bear in mind? How long will it take to implement?
The first step is to become as informed as you can about the SHOP program. Much is still uncertain, but there is a good deal of information available online. Next, speak with your accountant. The tax benefits of the SHOP program may, or may not, balance potentially higher premiums and coverage limitations (such as narrower networks) for SHOP plans. Then, speak with a broker -- though brokers have little experience with SHOP coverage and may not be very knowledgeable. Some, though, may have studied the options thoroughly and can be quite helpful. Finally, consult counsel on your eligibility for SHOP, the government reporting requirements in the program and the potential penalties for failures to report by the pertinent deadlines.
You list a lot of factors in your 'decision matrix'. Can you give me a little more detail about how I should approach thinking about whether it makes sense to transition from our current insurance?
The factors for consideration will vary with the size and nature of the business, but generally may include:
- Size of the company;
- Status of your current coverage, including premiums for the coming year and potential for increases in subsequent years;
- The breadth of the network in SHOP programs, versus your current insurance;
- Whether it may make economic sense to provide employees with funds to purchase individual policies on your state exchange, if your state has one (some state exchanges, like New York and California, are functioning quite well) or the federal exchange (when it becomes fully functional);
- Whether the tax benefits potentially available through the SHOP program justify coverage that may be narrower, with a smaller network of physicians and hospitals) and/or more expensive than your current plan.
- The potential administrative burden of requirements for reports to the federal government with regard to SHOP. Who will be responsible for filing the pertinent reports and being the benefits manager for this program? Is it practically and financially feasible to outsource administration of the program for your business?
- Discuss potential HIPAA issues in SHOP with counsel.