Health insurance is a benefit that most employees have come to expect. For business owners, deciding to offer health insurance to employees is an easy choice — but figuring out how to do it is far more complicated. The sheer number of plans available, including options through the insurance marketplace, makes this task daunting for many employers. Working with a benefits consulting firm is one of the best ways that business owners can navigate this process. But before you meet with a benefits consultant, take the time to review these simple tips to help you figure out what type of plan is right for your business.
Understanding Your Options
For business owners, there are three primary options for offering health insurance to employees. These include purchasing a group health insurance, shopping for a group plan on the health insurance exchange, and joining a professional employer organization. The best option for your business will be based on a number of factors, such as your employees’ salary, the overall health of your workforce, and the amount of flexibility your employees desire in a health plan.
Traditionally, business owners have offered a group health plan to employees. Most business owners assume that the monthly premium for group health plans is set in stone, but even smaller companies (with 50 to 99 employees) have the opportunity to negotiate their premium. If the overall health of your employees has improved, or your company offers incentives for employee wellness, these facts may help you reduce your monthly premium payments. A benefits consultant can review your company’s information and possibly negotiate a lower rate for your business.
Effects of the Affordable Care Act
Since the passage of the Affordable Care Act (ACA) in 2010, the availability of individual healthcare has provided employers with more options for offering health insurance benefits. This includes offering increased compensation to allow employees to purchase their own health insurance on the healthcare exchange. This gives employees the freedom to choose the coverage that is best for them, and take advantage of health care subsidies that may be available.
Take a close look at your employees’ average salary. If it’s less than 400% of the federal poverty line ($47,520 in 2016 for individuals), they may be eligible for these subsidies — but only if their employer does not offer a group health plan. A benefits consulting firm can help you decide if it makes more financial sense for you to offer increased compensation to employees rather than a group health plan. This option may also be attractive to any employees who are eligible for health care plans through their spouse or partner’s employer.
Advantages of a High Deductible Plan
If you do decide to offer health care benefits rather than a salary increase, consider alternatives to traditional group health insurance plans. Are your employees largely healthy, with no chronic illnesses? If so, then a high deductible plan might be best for your company. These plans offer low monthly premiums with higher deductibles. Employees will be responsible for paying the full deductible amount before coverage kicks in; this makes it incredibly important that you evaluate whether or not your employees can afford to pay a high deductible before deciding on this type of plan.
Also, consider shopping for a health plan on the Small Business Marketplace (known as SHOP). Health care plans selected through SHOP often offer employees flexibility in choosing what level of coverage they want, and are typically more affordable than private group health insurance plans. A benefits consultant may be able to help you navigate this marketplace and find out if your business is eligible for tax credits by using SHOP. He or she can also help you determine if a high deductible plan will be a realistic choice for your employees.
Questions to Consider
Figuring out what health insurance benefits are best for your business can be a complicated process. That’s why working with a benefits consulting firm can be incredibly helpful. A business insurance consultant can help you assess each of the factors that will determine which type of health care benefit you should offer, such as:
- How much can you afford to pay for health insurance?
- Do your employees qualify for health care subsidies?
- What health care network would be best for your employees?
- How much can your employees afford to pay for premiums and deductibles?
- What percentage of employees need health insurance?
- Are there financial incentives, including tax benefits, for the options you are considering?
- What level of flexibility in choosing providers do your employees want?
Contact The Business Benefits Group Today
If you are considering offering health care benefits to your employees, contact BBG by giving us a call or sending us a message online today. A benefits consultant from The Business Benefits Group’s business insurance division can guide you through this complex process, and make sure that you make the best choice for your company.