Searching for the best health insurance plans isn’t easy, and when you are a small business owner, health insurance becomes that much more difficult because you are responsible for a much larger family. Just like you care for your family at home, you want to provide for those you spend the majority of your day with. A job is just the beginning, and now with the Affordable Care Act, you have fallen under the pressure to provide some of your longer-term employees with health insurance. How can you meet your obligations to your employees and still keep the doors to your business open?
Are Small Businesses Available to Receive Health Care?
If you are a small business with fewer than 50 employees, you are not required to provide health insurance to your employees through your company. That being said, there are options for small businesses like yours to provide your employees, even new hires, with the best health insurance plans. Through this article, we plan to guide you on how you can assist your employees in their health care options in Houston, TX.
How Can I Help My Employees Receive Health Care in Houston, TX?
When workers choose to be employed by a small business, they understand that health insurance may be one of the benefits they may sacrifice. However, given the opportunities out there, an employee could see the grass greener, even for less pay, and take a position elsewhere, should the competition offer health benefits. This is why your company will want to provide the best health insurance plans to keep pace with a market that will not hesitate to offer the best talent a benefits package and lure your employee to their company.
So, what does offering the best health insurance look like? How can your small business offer a benefits package to your employees? If you are unaware, it doesn’t always involve pulling money out of your pocket and risk putting your business in jeopardy. Here are some ways to help your employees obtain the health insurance they seek.
The first two are listed here to give you a variety of choices. The most used is the final of the three.
Purchase Group Health Insurance – First, this is a way you can cover everyone in the building you choose to cover. Small business health insurance plans are designed to cover fewer than 50 employees. According to the Affordable Care Act, your choice must cover the Essential Health Benefits (EHB). When considering premiums, employers are limited to location, age, and tobacco use. While the law doesn’t require you to pay for your employee’s premium some companies may require you to pay up to half.
Self-insure – Next, this can be a slippery slope. Self-insurance is pretty much making yourself the insurance company. When an employee has a claim, they submit it to you, and you pay it. So instead of you having to pay a monthly premium for them to have insurance, you pay for their medical bills as they occur. You would often hire a Third-Party Administrator (TPA) to manage the claims processes. An employer can save money if there are few claims. However, you could get in deep quickly if there are multiple claims. There are also stop loss options with this choice.
Help employees find their own insurance – Finally, and probably the most popular of the options, is for your employees to find insurance on their own and then the employer to contribute toward the insurance. This can be done through programs such as Individual Coverage HRA (Health Reimbursement Arrangement) We will talk more about how ICHRA can benefit a small business in a moment. When employees look for insurance on their own, they can be the boss of what insurance provider, type of coverage they purchase, and who in the family they choose to cover.
Does the Affordable Care Act Provide Options for Health Care?
The Affordable Care Act may have tied the small business owner’s hands when providing health insurance in the past. That mandate has been done away with. Still, there are a few things the employer and employee need to know about their options in Houston, TX.
Marketplace – This is the everyday Affordable Care Act (ACA) health insurance marketplace. Everyone can purchase health insurance from the Marketplace during Open Enrollment. An employer will not have any ties to this. Every American is required to carry health insurance and, in some states, can be penalized for not following the mandate. Texas is not one of them.
Every year from November 1 through January 15, is Open Enrollment. If you currently have ACA coverage, also known as Obamacare, you have until December 31 to make changes to your current plan, the Jan 15 date is for new enrollees, but your plan will begin on Feb 1st. The benefits of having a Marketplace plan are:
- Compliance – You are in compliance with federal law.
- Coverage – You have medical coverage and don’t have to worry about paying out-of-pocket fees to be seen by a doctor or at a facility when you stay within your network.
- Cost-effective – You have discounted rates. Insurance allows you a discounted rate as opposed to being uninsured.
Employees like having a plan which they can rely on. As an employer, you want to provide each one with the best health insurance plans while still trying to keep costs down and maintaining ACA compliance. When you have an employ searching for insurance, this will be the best option for them if you are not in the position to provide options to them.
Individual Coverage HRA (Health Reimbursement Arrangement) – This option allows employers to use a health-based account to reimburse employees for their medical expenses. It is an alternative to traditional group health-based coverage, allowing employees to be reimbursed for individual health insurance premiums. The employer is still allowed to contribute as he would toward a traditional health insurance plan. These plans can be on or off-exchange as long as they meet the ACA guidelines. The employee submits a claim to the employer, and the employer pays the claim up to their stipulated amount.
If the employer offers the plan to one, he must make the plan to all. However, he can make it available to one class of employees and not to another, i.e., to Full timers and not to Part-timers or Salaried vs. hourly. There are class size rules that apply to prevent adverse selection. This program offers to the employee:
- Flexibility – Employers can create plans to fit an employee’s class. Just remember if you offer to one you offer to all. Full-timers or part-timers. Salaried vs. hourly.
- Customization – Employees can choose the best health insurance plan that fits their family needs. There is no one-size-fits-all plan.
- ACA Compliance – ICHRA meets all mandatory compliance and Minimum Value and Affordability.
- Administration – Helps employees on the tax side through its tax-free insurance premium status.
Employers have the option to contribute to the employee’s HRA, just as the offering of insurance. If it is offered to one, it must be provided to all. And it can be adjusted based on the class of employee.
SHOP Program – Small Business Health Insurance Options Program. This can be one of the best health insurance programs for your employees. There are four things you should know about how SHOP works. Unless these qualifications are met, a SHOP cannot be set up.
- Fifty or fewer employees
- Health insurance must be offered to all FT employees
- At least 70 must enroll at the initial offering, or will have to wait until annual OE period in November.
- Small business must have a physical location where business is conducted.
A SHOP program enables you to provide your employees health insurance through your small business through:
- Flexibility – You can offer your employees a health insurance plan, or from a list of plans. You can decide how much you pay toward their plan, if you cover dependents, and if there will be a waiting period.
- Convenience – All the plan information is in one location. All your plans elections can be made by looking at your options at Healthcare.gov. You can find the plans and how to qualify.
- Assistance – You can find a qualified agent to assist you, should you require one to answer questions or to take the next steps.
- Tax Credits – If you meet certain requirements, you may be able to receive tax credits. If you have fewer than 25 FTE (full-time equivalent) employees making less than 56K or less.
The SHOP program gives employers the blend of providing a benefit to the employees as well as the ability to receive possible tax credits. Another great benefit is that new employees do not have to wait for Open Enrollment. Through SHOP, they can enroll as soon as they are hired if you choose. You can also set up a new hire waiting period.
Final Words
Understanding which of the best health insurance plans will fit your small business and its employees can be difficult. This is our specialty at Covermile. We will assist you in finding the best policy that will fit your situation. By using our proprietary insurance matching technology, we can match you with the best plan for your small business and your employees and will meet Affordable Care Act standards at a price you can afford.
