Open enrollment season is fast approaching for many small businesses providing health insurance coverage to their workers. There is a lot to consider that goes into planning a company health care plan and with mass changes due to the Affordable Care Act (ACA), also known as Obamacare, questions linger.
To help small business owners and HR professionals gear up for 2015 open enrollment, ZipRecruiter has put together this ACA information and resource guide:
Affordable Care Act: 5 basic tips for small businesses
Anthony Lopez is the Manager of Small Business Sales for eHealth, a private online health insurance marketplace
Here are six basic tips that we provide for small businesses, whether they’re new to the group health insurance market or just looking to save money on costs.
- Consider new plans and new insurers: Some businesses get comfortable with a plan or insurance company they’ve had for a while. “We recommend that you take a fresh look at what’s available in the market every year,” says Lopez. “There may be new plans from different health insurance companies that you haven’t seen before. Some may better fit your needs in terms of coverage and cost.”
- Understand what your employees value most: This is a sensitive area, since you can’t ask your employees about their health status or inquire into their personal health care utilization habits. However, you can ask your employees to complete an anonymous survey that explores what kind of coverage they value most. Some are looking for robust preventive care. Some want low co-pays and deductibles. Others only want coverage that’s there to back them up in case of a serious illness or injury. Better understanding of your employees health insurance needs and preferences can help you when choosing between new options.
- Look at new cost-sharing strategies. Depending on what’s available in the market and what your employees value most in a group plan, you may be able to find a new plan with a different cost-sharing strategy that allows you to continue providing coverage at a more affordable cost to you. This may entail decreasing your contributions to employee premiums, or dependent premiums, or it may entail moving to a higher deductible or a plan with higher copayments.
- Consider HSA-eligible health plans. Premiums tend to be a little lower for HSA-eligible health insurance plans and since they provide employees with a valuable tax-saving tool, they’re worth a look. Health Savings Accounts (HSAs) are tax-advantages savings accounts that allow consumers to save money for qualified medical expenses on a pre-tax or tax-deductible basis. Employers will often contribute funds into these accounts for workers too, up to prescribed limits. HSAs can only be used with eligible health insurance plans. Work with a licensed agent to learn more.
- Know what the health reform law means for you – and what it doesn’t. A lot of small business owners assume that they’re going to be required to provide health insurance to workers –or be fined if they don’t. But in fact, unless you have fifty or more full-time workers (or the equivalent in part-time workers), you are not going to be required to provide group health insurance coverage. If you choose to do so anyway, you may qualify for special tax deductions. (Keep in mind that regardless of whether you provide group health insurance benefits, chances are that you and your employers are required to have health insurance under the ACA; if not provided through an employer group it may have to be purchased individually.)
- Work with a licensed agent to create a total benefits package. Most small business owners know that offering competitive benefits helps them to hire and retain the best workers. But health insurance is just one element in a total benefits package. When shopping for group health coverage with a licensed agent or broker you can also get quotes for dental and vision insurance.
Small Business tax credits under the ACA
These tips from eHealth can help understand tax credits under the Affordable Care Act:
- Though businesses with fewer than fifty full-time workers will not be required to provide group health insurance under the Affordable Care Act (ACA), the law creates incentives for some of them
- Small businesses with 25 or fewer employees and average annual wages of less than $50k may qualify for a tax credit
- Qualifying small businesses who provide coverage may receive a tax credit for up to 50% of the employer’s contribution toward the employee’s premium.
- Credit for qualifying small businesses are calculated on a sliding scale based on the number of employees in the group and the average wages; the maximum credit is available to businesses with 10 or fewer employees and average annual wages of less than $25k
Small Business Survey Highlgihts
eHealth surveyed its own small business customers last year and found some interesting things. The company is in the process of compiling and analyzing a new survey which will be published soon (look for updated survey info when available). The following data points are from 2013 in a survey of small businesses, all with fewer than fifty full-time workers:
- A majority of small business group health insurance policy holders (56%) didn’t understand the nature of the ACA’s employer mandate, incorrectly believing that they were required by the law to provide group health insurance coverage, or else to pay a fine for not doing so.
- Most small businesses offering group health insurance to employees do so out of a sensed moral obligation (44%) or because it helps them recruit talented employees (31%)
- A third (33%) of employers offering group coverage to workers answered “yes” or “maybe” when asked whether, based on their knowledge of health reform, they might consider dropping group health insurance in 2014.
2015 health benefits program checklist
As a better way to ensure successful open enrollment outcomes, Mercer, a global leader in talent, health, retirement, and investments, has developed a short checklist for employers to follow as they design, implement, and roll out their 2015 health benefit program offerings:
- Consider offering a consumer-directed health plan.
- Communicate early and often.
- Make voluntary benefits a big part of the message.
- Reinforce wellness campaigns.
- Support accountability with decision-support tools.
Outsourcing your health care benefit plan needs
If you’re a small business owner and don’t have the background, experience or HR staff to develop and roll out a health care benefit plan, consider finding an outside provider to assist. For example, Doherty is one of only a handful of compliant and reliable Human Resources Outsourcing (HRO) companies accredited by the Employer Services Assurance Corporation (www.ESACorp.org). They serve public and private organizations of all sizes nationwide, but primarily service the states of Minnesota, Wisconsin, Iowa, Illinois and North and South Dakota.
The Doherty article How Employers Should Prepare for Health Care Coverage in 2014 also provides useful information for 2015 and provides insight for small businesses to consider.
Additional Affordable Care Act Resources
In addition to the above resources, this blog from Doherty provide additional insight:
Health Care Reform with Doherty | A PEO partnership provides many ways to shelter your business
In addition, the Society of Human Resources Management offers a wide variety of ACA information and resources, including:
SHRM Affordable Care Act Resource Center
SHOP Exchanges May Lure More Small Businesses
