With the ever-expanding growth of the small business, the health care industry has had to expanded to include the best health insurance for the worker. With the variety of choices, which health insurance is best for the small business in Texas that also assists the employee? Is there such an option? And if there is, how can an employer provide such a benefit to their employee without hurting their bottom line? As a small business, you want to compete with the larger companies and attract the best workers, which means providing the benefits that draw the cream of the crop and encourage them to stick with you.
The History of Health Insurance for the Small Business
Since the inception of the Affordable Care Act, many small businesses have worked to adapt to the changes in health insurance laws. This at times included reducing employees’ hours to fall below the 30-hour mandate to avoid having to provide health insurance benefits. This proved to be a double-edged sword. It helped them financially but also hurt them on the employment side. Those long-term employees that had stood by them started to make a mass exodus. The visions of finally obtaining the best health insurance, even elsewhere was too hard to pass up, and as an added benefit, they would be able to pick up the hours they lost.
Today, small businesses aren’t as stingy with the health insurance reins. They see the importance of it as well as the benefit of the hard-working employees. True, some businesses out there still follow a 29 ½ hours and you clock out and go home mentality, but those are growing fewer as laws are becoming stricter on those that do. Also, the best health insurance is becoming more available for those that desire to obtain it. But for you, as a small business owner, you want to provide your employees with the most affordable options, whether it is from an internal plan, the Affordable Care Act, or a cost-sharing plan like an ICHRA (Individual Coverage Health Reimbursement Account). But what can you do when your business options are limited?
The Best Health Insurance Available to the Small Business
The larger the company becomes, the more options it can offer their employee. Until then, instead of a business having to shoulder the cost of employee benefits, employers can assist with finding the best options for their situation. Right now, guidance can be the best means of support.
If a business doesn’t provide insurance for its employees, workers have two options:
Open Market – There are two reasons why the open market isn’t the insurance shopper’s best option. The first is cost. On the open market health insurance can be become more costly, especially as you lower your deductible and add dependents. The second is you lose the opportunity to use premium tax credits to pay for your insurance. However, the amount of premium tax credit is dependent upon your household income, so the premium tax credit benefit is not always a guarantee.
Marketplace – The Marketplace was created due to the Affordable Care Act. This method is simply leading your employees to the Marketplace for them to receive coverage for them and their families. The good thing about the Marketplace is that the pre-existing condition problem is solved. Insurance providers are prohibited from refusing applicants due to health conditions and insurers cannot raise rates due to pre-existing conditions. This makes it the more affordable option of the two as well.
Both options cost money out of the employee’s pocket, and when families are on a budget, any help they can get from their employer is a benefit. And as a small business owner who values their employees, providing guidance will help them develop loyalty to your company.
While neither of these options can be paid through a payroll deduction, assisting your employee with finding their insurance plan will go a long way as some employees feel it is the employer’s job to assist them with finding health insurance in the workplace.
How Employees Can Sign Up for the Best Health Insurance Plans
One benefit to not having to setup health insurance benefits through your company is that there will be no probationary period within your company. Employees can find the best health insurance plans through any means they desire at any time. As one who desires to have a well-oiled machine with a happy home, you want to have those under you to have a reason to have good things to say about their work life. An employer looking after their employees is one of those tenants conducive to a productive business atmosphere. This can also mean providing a way to guide your staff to where they can sign up for health insurance when they require it. And, if possible, ways they can reduce the costs of the insurance itself. More on this in a bit.
The Affordable Care Act
The Affordable Care Act is the insurance law implemented under President Barrack Obama in 2010. The plan sometimes bears his name as, Obamacare. Through The Affordable Care Act, individuals who do not have an employer-sponsored insurance program are able to purchase the best health insurance plan options through the Marketplace. The best part of the ACA is that the employee does not have to worry about medical screening or waiting periods for pre-existing conditions. They are covered from day one their policy begins. On the open market, there will usually be at least a one-year waiting period, then a reduction of benefits for said condition. This is one reason the Affordable Care Act is the best health insurance for small businesses in Texas.
Through the Affordable Care Act insurance option, employees can obtain insurance through the Marketplace and have their choice of insurance without having to go through your business or paperwork. They still need to meet the requirements of the ACA:
- Open Enrollment period is from November 1 thru December 15.
- Some states allow OE until January 15.
- Special Enrollment can be an exception for qualifying events like childbirth or marriage.
The Affordable Care Act doesn’t only benefit individuals; it has also worked its way into benefiting small businesses and employees by giving them options to employer-sponsored health insurance programs through tax credits. As we spoke of earlier, the small business initially struggled with the ACA. But it eventually grew and found its own.
Small Businesses in Texas Can Help with Health Insurance
Here are a couple of the best health insurance plan options small businesses can use to assist their employees with obtaining the coverage they seek:
Small Business Health Option Program (SHOP)
Another option for a business with 50 or fewer employees is through sharing the costs of their health insurance. This benefit can help provide insurance is through a tax credit program called SHOP (Small Business Health Options Program). Employers can benefit their small businesses through a health care option for their employees.
The qualifications for taking part in SHOP are:
- Fewer than 25 FTE employees.
- Average employee salary 56K or less.
- Employers pay 50 percent of employee’s premium costs.
- Employer offers SHOP to all their full-time employees.
Individual Coverage Health Reimbursement Arrangement (ICHRA)
Individual Coverage Health Reimbursement Arrangements are plans that work outside of an employer’s benefit plan options. But at the same time, it is a benefit program that gives employee’s reimbursements through the company for their health coverage. It is a win-win situation.
How it works is that an employee finds health insurance coverage on their own, however fits a family best. This can be an on or off exchange plan. Once the employee is set up with an insurance plan, they submit their premium payments as a claim. Once their claims are approved, employees can then be reimbursed for their expenses.
Then employers are given three options to contribute to the employees account:
- Option One: Pre-Imbursement Only: This will either give a predetermined amount of money or percentage to the employee toward their premium.
- Option Two: Premium Imbursement + Pretax: All the options of Option One plus the option to pretax excess premium not covered set amount.
- Option Three: Premium Imbursement + Pretax + Medical Expenses: All of one and two plus a predetermined amount of pretax dollars for medical expenses.
While there are many options for small businesses to work with their employees to assist them with obtaining the best health insurance coverage, the best option will be to find health insurance through the affordable care act. The primary reason is portability; the employee will be able to carry the insurance should they ever choose to leave the employer. They don’t have to worry about a change in costs or applying for new insurance. Although if there is a relocation involved, they may see a change in cost because one factor in ACA rates is location.
However, it is also beneficial for employers to know there are options like SHOP and ICHRA for employees who desire direct assistance with health insurance coverage for themselves and their families.