How Can A Small Business Offer Affordable Health Care Plans?
Dan Levenson February 05, 2016
In a time when small businesses are hurting due to health insurance rate hikes, many want to start looking for alternative affordable health care plans. You’re probably feeling this pinch yourself, no matter how many employees you have in your small business.
When the Affordable Care Act went into law, small businesses with under 50 employees didn’t have to buy insurance if they didn’t want it. Those with over 50 employees had to, yet received affordable options. You’ve perhaps found this favorable if you’re out of the running getting traditional group health insurance.
Of course, times have changed and thus the government’s requirements for small businesses have too. But with these changes have also come different options for group health insurance.
Thanks to these new opportunities, you can finally offer more affordable health plans to employees who want it. Basically, you have three good options that work well for most small businesses. The choice you make depends on what your employees want and how much money you want to spend.
You’ll discover all these choices have some creative ways to get around paying more.
The SHOP Marketplace
The Affordable Care Act offered one great angle to small businesses: Health plans made exclusively for small employers. Through the SHOP Marketplace (which stands for Small Business Health Options Program), you can find alternative plans priced cheaper than traditional group health plans.
While SHOP plans still have room to grow in terms of being widely adopted, they could offer the chance to save money. Currently, three different types of plans exist in this marketplace.
The first plan is “Employer Choice,” where you choose the plan for your employees. The second is “Hybrid Choice,” where you offer various plans through a specific level, then employees choose from those options. The third is “Employee Choice,” where you give complete freedom to your employees to choose the plan they want.
As of last year, every US state has to offer the “Employee Choice,” giving small business employees more options than ever. Nevertheless, it’s important to stay circumspect. In some states, you have to enroll a certain percentage of employees, depending on how many employees you have in your business.
Reimbursing Health Care Premiums
For this option, you have a little creative maneuvering at play to help save on premium costs. This works by setting up a Healthcare Reimbursement Plan through a healthcare professional or via health reimbursement software. It allows you to set up a monthly healthcare allowance to all your employees.
Afterward, your employees have freedom to go out and get the health care plan of their choice. Then you simply reimburse the amount of their premium up to their particular balance amount.
Doing this is popular since it avoids paying larger premiums to group plans. Plus, some of your eligible employees can get tax benefits off their premiums.
The better news is that healthcare reimbursement plans are tax-free. Employees can also reduce the costs of insurance by up to 50%. If an employee leaves you, they can keep the same insurance plan for as long as they continue to pay for it.
Working With An Insurance Broker
It’s tempting to believe that offering a health plan with benefits doesn’t make sense at this stage of your business. Many small businesses end up putting the responsibility of finding insurance on their employees and try to stay out of the process if they can.
The truth is, there are more benefits to offering your employees coverage than you’d expect, and ways to go about offering it without tanking your business’s finances. Businesses who offer health insurance benefits have less trouble retaining valued employees because they won’t be tempted away by another company with better benefits. Plus, if you’re looking to recruit great talent, you can make your business more appealing to jobseekers by offering health insurance.
By working with an insurance broker to assess your business’s needs and find a policy that fits your budget, you can continue to offer great benefits and keep your employees happy.
No matter what option you take, we’re here to help you choose wisely. Schedule a free, 30-minute consultation with one of our experience insurance experts, and we’ll help you assess which path makes the most sense for your business.