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The SHOP Marketplace delay

Several weeks ago the Obama administration announced that they would be delaying online enrollments for the SHOP exchange, where small businesses can come and purchase coverage.

Online enrollment will be delayed for one year, and will resume in November of 2014. This delay however does not mean that small businesses will not have access to this marketplace. They will simply have to go through agents and brokers that are participating in the SHOP marketplace instead of accessing it online.

Furthermore, in 2014 there are two significant changes coming to the Small Business Health Care Tax Credit. One is that the credit will increase from 35% of employer nonelective contributions towards coverage to 50% of nonelective contributions for eligible employers, and two; that eligibility will require that the employer sponsored coverage be offered through a SHOP exchange.

The one year online enrollment delay begs the question of whether or not eligibility for the Small Business Health Care Tax Credit will be contingent on the employer offering coverage through a SHOP Exchange. The government has given us clarification on this issue through an FAQ document they have released. Very simply put, eligibility is still contingent on the employer offering coverage through a SHOP exchange. This will likely mean that fewer employers will receive the credit in 2014, simply because it is expected that fewer employers will access the SHOP exchanges due to the one year enrollment delay.