How does employee health insurance work for business across multiple states?
Small and large businesses alike are faced with a new set of decisions to make about providing health insurance for their employees after the Affordable Care Act went into effect. The Federal government has created the SHOP exchange to assist employers in finding affordable health insurance plans for their employees by state. However, many business owners own businesses in multiple states or have employees working in multiple states. Below is a guide for business owners in this situation.
One option for businesses with employees in multiple states is to create one SHOP account in the state where the primary business is located. Under this account you can choose a plan for all of your employees. You must be sure that the plan you choose has a nationwide network, or at least networks in each of the locations you have employees. Under this option, all employees at all of your locations will be counted when calculating your minimum participation rate (the percentage of employees required to enroll in the plan in order for your business to be eligible to use the SHOP exchange to provide health insurance to employees).
Another health insurance option small businesses may choose if they employ people in multiple states is to use is to create separate SHOP accounts for each state in which you have employees (assuming your business is eligible to use SHOP in all of these state. In this case you can offer different plans to employees in each state. The number of employees used to calculate your minimum participation rate will be based on the number of employees in each state, as each state has its own laws regarding the minimum participation rate for businesses to be eligible to use the SHOP exchange.
Owners of multiple businesses face more questions. If multiple businesses are owned under the same EIN, business owners should basically treat these businesses as one business. Only one SHOP account may be created per state under the same EIN.
Owners of multiple businesses listed under separate EINs should create multiple SHOP accounts. Each business must qualify to use SHOP independently, and must pay separate payments. Owners of multiple businesses under separate EINs are able to choose different health insurance plans for each business. Firms like Employee Benefit Design can be helpful in choosing the right health insurance plan for each of your businesses, as there may be a benefit to choosing one plan over another for each of the businesses you own. Each of these businesses must maintain their own SHOP accounts and separate payments.
While many resources exist, your best resource is a broker. Brokers are available to help you decide which SHOP plan is best for your company, if any. The brokers at Employee Benefit Design are here to help you decide which health insurance plans in Springfield, MO are best for your employees, and how to save the most money for your business while still offering your employees the benefits they desire.