The ACA works by creating a federally regulated health insurance marketplace (i.e., health insurance exchanges) for single individuals, their families, and small businesses. The Small Business Health Options Plans (SHOP) marketplace is the ACA’s program that focuses on the health insurance needs of small businesses. However, many small-business owners incorrectly assume that they must buy group health insurance through the SHOP marketplace.
As a small business owner, you understand that the high cost of small group health insurance prohibits you from offering health coverage to your employees. The SHOP marketplace’s intent is to provide small-business employers with the chance to purchase federally subsidized, low-cost group health insurance. The caveat is that not every small business qualifies for tax credits to offset costs in the SHOP marketplace. This is part of the reason why many small business owners are seeking Defined-Contribution plans as an affordable health care solution for their organizations.