The new SHOP insurance marketplace at Healthcare.gov gives young company affordable options.
Ryan Irvin and Amanda Stitt are the kind of small business owners who want to do the right thing for their employees. But they’re also business owners who need to pay attention to the bottom line.
Fortunately, they’re able to do both. The Small Business Health Options Program (SHOP) Marketplace at Healthcare.gov gives businesses with less than 50 employees everything they need to find the right plan for their employees and get them all covered.
Irvin and Stitt’s business, Change Media Group in Lansing, Mich., is among the first businesses to use SHOP, says Irvin, the company’s president and chief analytics officer. The SHOP Marketplace, which is the small-business portal at Healthcare.gov created under the Affordable Care Act (ACA), opened in fall 2014 and is available for enrollment year-round.
Last year, Irvin and Stitt — who are married with a baby girl, Amelia — were paying for their own insurance after Stitt transitioned from her previous job to become chief executive officer of Change Media Group. They were also paying the premiums of one full-time employee who purchased her coverage at Healthcare.gov.
But setting up an employer plan through the SHOP Marketplace made a lot more sense, says Irvin.
For Amanda, Amelia and myself, we were paying $1,282 in premiums last year. We’ll get to deduct those premiums from our taxes but we won’t get the small business tax credit offered through SHOP. Add on what we were paying for our employee’s coverage and we were paying $1,539 a month.
For 2015, with our SHOP plan, we’ll be paying $1,448 a month for our family and that one employee, which is a savings of $100 a month in premiums. Plus, instead of a tax deduction of 25-30% for our premiums we’ll get a 40-50% tax credit to the business for the premiums we pay.
What’s more, the benefits with the new plan are actually better. Instead of $15, co-pays for office visits are just $5. That savings will add up over the course of the year, when the family could be seeing the doctor 30 or 40 times for Amelia’s routine schedule of pediatric care and office visits for Irvin and Stitt.
“We have a baby so we’re all getting sick all the time,” says Irvin with a smile. “But I paid nothing for my annual physical — preventive care is really important — and a lot of our prescriptions, including my asthma medicine, don’t have a co-pay anymore.”
According to Stitt, the money they’re saving is being spent on office improvements that can keep them out of the doctor’s office, such as a treadmill desk for Irvin and ergonomic work station setups that offer a choice of standing or sitting. “We both have lower back pain and standing every day can really help,” she says.
The money also helps them offer other employee benefits, such as a 3% match on retirement savings. Irvin and Stitt agree that employee benefits like these help their operation be more competitive. As Irvin explains, it levels the playing field.
Being able to compete with bigger, more established businesses would be more difficult without these relatively inexpensive plans. A lot of businesses like ours either don’t hire people if the benefits are expensive or they hire few people and work them hard.
Not having access to affordable health insurance would have limited our choices and our ability to invest in people. There’s a premium on talent in the marketing, digital and advertising field we’re in. We wouldn’t have been able to hire as many people to put us in the strong position we’re in now to serve our clients.
Stitt agrees about the ability to be more competitive, especially as a smaller firm going after the same talent pool as big agencies. But there’s even more to it than that, she says.
Providing health insurance to our employees is the right thing to do. If we didn’t provide health insurance and someone got sick, I’d feel responsible for anything that went ignored and untreated, or for someone having to pay out of pocket.
We also understand that when people are sick, they’re less productive. We want our team to be healthy and happy.
It’s important to note that Change Media Group is small enough that they are not required to provide health insurance under the ACA — but they did it anyway, for all the reasons they’ve shared.
The company just hired a new employee, and Irvin says it’s easy to add employees to the plan as needed. In fact, he and Stitt say the entire process of choosing and setting up their employee coverage was simple and efficient.
“The direction this is going is very good for helping businesses like ours be able to provide healthcare at a lower cost,” Stitt says. “It’s good for the employees and for us.”
Small businesses can set up coverage and add employees to the plan year-round. Employers must use the SHOP Marketplace and meet other eligibility requirements to receive tax credits worth as much as 50% of their contribution to employee premiums. To learn more, visit the SHOP Marketplace.
[Photo credit: Brian Town]