No, a business does not need to have an established Section 125 plan to participate in our SHOP. Here are the eligibility requirements for SHOP participation:
- 50 or fewer full-time employees in 2014
- SHOP will be opened up to employers with 100 or fewer full-time employees in 2016
- Tax credits will be available in 2014 and 2015 for employers with 25 or fewer employees and average company wages less than $50,000/year (excluding the owner(s) and owner(s)’ families).
Only employers with more than 50 Full Time Equivalent employees will be subject to penalties. These employers must offer a health insurance package that meets the Federal Essential Health Benefits (EHBs) and does not cost their employees (not including dependents) more than 9.5% of their household’s annual salary.
The penalty for employers with more than 50 FTEs who do not offer the coverage as outlined above will be $2,000 x (FTEs-30). For example, if an employer had 51 full time employees and did not offer coverage that meets the requirements, the employer would have to pay a penalty of $42,000 ($2,000 x 21 = $42,000).
Posted in: Employers