Some small-business owners are snubbing the new health-insurance exchanges, operating under the Small Business Health Options Program, citing limited federal tax credits and a small menu of insurance offerings in a few states, companies and health-insurance brokers said.
Under the program, small businesses in 33 states have been able since Nov. 15 to buy coverage for their employees through HealthCare.gov, the Affordable Care Act’s online insurance enrollment site. The federal government operates SHOP exchanges in these states, which include Delaware, Georgia and Missouri. Seventeen others and the District of Columbia choose to operate their own SHOP marketplaces.
By obtaining insurance through SHOP, some business owners can qualify for tax credits worth up to 50% of their contribution toward their employees’ premium costs. There is no requirement for the businesses to sign up, and the tax credits can only be received by firms that employ fewer than 25 employees, and that pay average annual salaries of about $50,000 or less.
In Missouri, for instance, three small-business clients of insurance broker Emily Bremer of St. Louis qualified for the tax credits but they “said it was so much work for so little money that it wasn’t worth it,” she said. One of these companies, which employed fewer than 10 workers with an average salary of about $25,000, received a $1,400 tax credit a year, she said…
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