Small Business Employers

Andrew Test

Offering health benefits is a major decision for businesses. Virginia’s Insurance Marketplace makes it easy for you to find a plan that fits your needs through the Small Business Health Options Program (SHOP).

small business owners

What is SHOP?

SHOP is a resource for small business employers who want to provide health insurance to their employees. If your business is eligible for SHOP, you don’t have to wait for an Open Enrollment Period to enroll in a plan. You can start offering SHOP coverage to your employees anytime. Enrolling in a SHOP plan is the only way a small business or nonprofit can claim the Small Business Health Care Tax Credit. This tax credit can be worth up to 50% of the costs you pay for your employees’ premiums. 

SHOP plans are options for small employers to provide health and/or dental insurance to their employees. Click here for a list of companies that offer SHOP plans. Visit the Federally-facilitated SHOP for resources on SHOP coverage. Details about the Small Business Health Options Program (SHOP) can be found in our FAQs.

SHOP Overview

  • SHOP coverage can be purchased for your employees at any time of the year.
  • Premiums charged cannot be adjusted more frequently than annually, except that the premium rate may be changed to reflect changes to (i) the family composition of the member, (ii) the coverage requested by the member, or (iii) the geographic location of the member.
  • No coverage may be offered only to certain eligible employees or their dependents and no employees or their dependents may be excluded or charged additional premiums because of health status.All products that are approved for sale in the small group market that the health insurance issuer is actively marketing must be offered to all small employers, and the health insurance issuer must accept any employer that applies for any of those products.
  • A health insurance issuer that offers health insurance coverage in a small group market through a network plan may limit the employers that may apply for such coverage to those eligible individuals who live, work, or reside in the service area for such network plan.

  • To offer SHOP coverage to your employees, you must:

    • Have 1–50 full-time equivalent employees.
    • Offer health coverage to all full-time employees.
    • Enroll at least 70% of the employees you offer insurance to.
    • Have an office or employee work site in Virginia. 

    • Complete and submit the Small Employer Self-Attestation Form.

       

    To verify SHOP eligibility, small employers will attest that their small business has a primary business address in Virginia, has at least one employee enrolling in coverage who isn’t the owner, business partner or spouse of the owner or business partner, has from 1-50 full-time equivalent (FTE) employees, and offers SHOP coverage to all full-time employees.  Note: the SHOP must treat a qualified employer which ceases to be a small employer solely by reason of an increase in employees as a qualified employer until the qualified employer otherwise fails to meet the eligibility criteria or elects to no longer purchase coverage for qualified employees through the SHOP. 
     

  • SHOP insurance gives you choice and flexibility. You can:

    • Offer your employees one plan, or let them choose from multiple
    • Offer only health coverage, only dental coverage, or both
    • Choose how much you pay toward your employees' premiums and whether to offer coverage to their dependents
    • Decide how long new employees must wait before enrolling 
       

    Once you're ready to enroll in SHOP coverage, you have two options:

    • Contact your insurance company and enroll directly through them.
    • Enroll with the assistance of a SHOP-registered agent.

  • 1. Can I enroll in the same SHOP coverage that I offer my employees?

    Yes, as long as at least one of your employees (who isn't a business owner, partner, or family member) also enrolls in your coverage.

  • 2. Do I have to provide insurance to my employees?

    If you have 1 to 50 full-time equivalent (FTE) employees, you're not required to provide insurance to your employees. You can choose to offer insurance through SHOP or any other source. But you don't have to, and there's no penalty if you don't.

  • 3. If my only employee is my spouse or a family member, can I use SHOP to cover us both?

    Generally, no. Spouses and family members don't count when determining if your business is eligible to use SHOP. To be eligible, you must have 1 to 50 full-time equivalent (FTE) employees who aren’t business owners, partners, or family members.

  • 4. Can my employees enroll in SHOP coverage after the initial enrollment period?

    Yes, but only if they qualify for a Special Enrollment Period due to a life change, like having a baby, adopting a child, or getting married.
    For new employees hired after your initial SHOP enrollment period, you can decide on a waiting period before coverage can become effective. Waiting periods can't exceed 90 days. 

  • Use the full-time equivalent (FTE) employee instructions below to see if your mix of full-time and part-time employees equals between 1–50 full-time equivalent employees. Generally, only businesses with 1–50 FTEs are eligible for SHOP.

    • Full-time employees that work at least 30 hours per week in any month are counted as one full-time employee. 
    • Part-time employees are those who worked an average of less than 30 hours per week. To calculate the number of “FTE equivalents” in your business, take the number of hours worked by all part-time employees in a week and divide that amount by 30. (Example:  2 part-time working 20 hours per week = 40 hours/30 = 1.333.  Count this as equivalent to 1 FTE.)
    • Seasonal workers are counted if they work over 120 days in a year.

    When calculating the number of full-time or part-time employees:

    Include:

    • All full-time employees of a group if your business is affiliated with another employer, under common ownership, or a part of a controlled group. 
    • Employees under a common group in other states – even if you’re enrolling in separate state SHOPs.

    Don't Include:

    • Partners.
    • Shareholders owning more than 2% of an S corporation.
    • Owners of more than 5% of other businesses.
    • Family members or members of the household who qualify as dependents.
    • Seasonal workers working 120 days or less in a year.
    • Independent contractors (Form 1099 workers).
    • COBRA and retired enrollees.

    Virginia will continue to follow the Federal FTE Method to count employees: Full-time Equivalent (FTE) Employee Calculator

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