ACA SMALL BUSINESS SHOP PROGRAM DOESN’T WORK—-REALLY

The Affordable Care Act Small Business SHOP program Doesn’t Work—-Really.

A couple of months ago I sent out a blog about my experience trying to help a McNett Agency small business client apply for the Small Business Affordable Care Tax Credit through the Federal SHOP Exchange.

This blog detailed my frustration with the utter unworkability and the seemingly insurmountable problems I had, at the time, working though the website to get this tax credit for our client, and how I finally had to tell our client that I simply could not get it done.

Well, it good to see that I am not, apparently, stupid and that this has been a nationwide problem.

Uptake of the Small Business Tax Credit SHOP program has been only a fraction of what was estimated.

In a meeting of the House Small Business Committee, witnesses confirmed that the complexity and flawed website have kept thousands of small businesses from obtaining this tax credit, which was supposed to be a way for many small businesses with 25 or fewer employees, with average salaries of under $51,800, to be able to afford to offer group health coverage to their employees.

One witness, Harold Jackson, chairman of Buffalo Supply Co, testified to the committee:

“It took me two or three days to gather up this information, “ Jackson said. He said a lot of this information he didn’t have, such as spouse’s and children’s Social Security numbers, dates of birth, and whether or not employees spouses smoked. “I spent about 10 hours entering this information into the system, after which I couldn’t figure out how to review the plans available or get quotes.”

A government SHOP Exchange representative told Jackson to contact a broker. Even though he called the broker the SHOP rep had recommended, the broker refused to try to get Jackson a small group quote from the SHOP Exchange. The broker told Jackson that “going through the SHOP Exchange is too much hassle.”

As a broker, I heartily agree.

Jackson said Congress could fix the tax credit by offering it to employers who buy group coverage off the SHOP Exchange (as it was done before 2016,) increasing the wage cap, making the tax credit available for more than two consecutive years and simplifying the application process (my emphasis.)

The concept of this tax credit is good. The implementation could not have been much worse.