Small Business Brief

Insurance

Business Health Insurance: Do You Need It and How to Find a Policy…


Even with the ACA changes of the last year, there are still just 30 million uninsured people in the country. That means that most people get insurance either through work or on their own. If you’re running a business, you might be unsure of what the business health insurance requirements are for you in the coming year.

Here is everything you need to know to stay above the law and provide benefits to your employees.

Is it Required?

Ever since the Affordable Care Act eliminated the individual mandate, many people have wondered what to make of it. While individuals don’t have to get insurance, employers have to provide it to employees.

Large employers who employ more than a certain number of people need to provide their full-time or full-time equivalent employees with it. A certain percentage of those employees need to have access to minimum essential coverage or else the employer will face fines.

The 2019 definition of an employer that fits this bill is one that employes 50 or more full-time or equivalent employees for more than six months in 2018. While the definition of a “large employer” might change as additions are made to the law, this is the current status of the law for 2019.

If you’re working at or you run a small business that doesn’t meet this figure, then you don’t have to offer insurance coverage to your employees.

If you do, you need to look through all of the options out there so that you can offer good benefits without overpaying. Offering benefits is a loss leader only to those employers who think about things in the short term. Any employer who has tried to woo a talented candidate in the past knows that a good insurance plan can make or break the future of a company.

Check Out Traditional Group Health

Under the ACA, there are state and federally-run marketplaces that help offer insurance policies. They offer group health insurance policies that meet the minimum benefits, so there’s no need to read through all of the fine print to make sure that they work. Small businesses that can afford premiums and meet participation requirements can do well by offering these kinds of plans.

The best way to ensure that these plans work for employees is to ask them. They’ll know their own healthcare needs and be able to tell you if they get value from the group policy or not. The more transparent you can be with your employees, the more they’ll help you to choose the right plan.

Offering a good group policy helps to build loyalty with your employees. Those employees with a family are going to stick around to help you build your business since you’re offering them something they need.

Try QSEHRA

Small employers are turning to this new health reimbursement arrangement created in late 2016 when they’re looking at options. This type of arrangement was created by Congress to help small employers offer their employees a monthly amount of untaxed income. Employees build this account to use toward healthcare.

Since the money goes untaxed, it offers a cushion to the amount that would be spent on insurance every month. Employees pick their own plans under this system and then pay with a reimbursement from the business. They get a dollar amount up to the monthly allowance.

The reimbursements won’t be subject to payroll tax from the business and the employees don’t have to claim it on their income taxes. If the plan they’re paying for meets the criteria of minimum care, they’ll be in the clear.

Small businesses that have tried QSEHRA find that it helps businesses to set a budget that works for them. It also frees up employees to find plans that work for them.

Look Into Group Coverage HRAs

For small businesses that want to offer the best of both, a combined group policy and is possible through an HRA. You get all of the benefits of a traditional group benefits program as well as the reimbursements you get from QSEHRA. Group coverage HRAs allow your company to offer a high-deductible health plan along with that tax-free money.

These HRAs reimburse the deductible or any expenses from coinsurance that the group policy also covers. The one thing they don’t apply to are individual insurance plans. When you choose to offer this, make that clear to your employees who might want to seek out individual insurance on their own.

Association Health Plans Are Available

The department of labor recently expanded how small businesses were able to apply for AHPs. The availability was once more restricted but now small businesses can work together within industries or even geographic areas to buy large policies. This means they can get all the benefits of a massive group policy that big corporations have without having to put forth a lot of capital.

This will function just like a normal group policy or any self-funded health benefits that a large company would get. The only major difference is that these aren’t subject to the rating rule which keeps insurers from varying costs in a region. This prevents a lot of discrimination in pricing.

Another major difference is that the essential benefits that ACA policies offer won’t apply. There are fewer consumer protections but then there’s the benefit of a group policy to balance it out. If you pursue this path, make sure you check all of the math twice.

If you’re looking at all of your options, make sure that your staff knows about the benefits of low Canadian pharmacy prices.

Business Health Insurance Provides Value

When you offer business health insurance to your employees, you ensure that everyone who works for you is safe at work and outside of work. You rely on your well-trained staff to be in good health to provide you with the best work they can. Treat them right and they’ll treat you right in return.

While you’re doing all of your balancing of costs and benefits, check out our guide to make sure you’ve got the right accountant handling the work.



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