7 Tips to Maximize Your Employee Health Care Insurance Rollout
With the Affordable Care Act taking up most of the media oxygen, more and more small business owners are grappling with a crisis of their own – trying to set up a new health care insurance plan for employees, either from scratch or by improving on a current plan.
Certainly, company staffers are locked in on getting the right health care insurance from their employers.
According to a 2018 study from Aflac, 60% of U.S. career professionals say the top issues concerning them are “increasing out-of-pocket medical expenses or the increasing cost of major medical or health insurance over maintaining their health benefits or the possibility of their employer eliminating spouse coverage.
Additionally, 25% of employees say they “had difficulty paying a medical bill due to high medical costs”, while 81% believe their medical bills will continue to skyrocket.
“There are quite a number of benefits that offering health care plans to your employees can bring, even if you own a small business,” says Hardik Soni, founder and medical director at Ethos Spa, in Summit, N.J. “As a small business owner, this is entirely optional, but when you have health care plans available, you will attract new professionals to your business.”
“You’ll also be able to keep existing employees happy and healthy – which ultimately leads to better production in the workplace,” he adds.
With good health care insurance front and center on the minds of Americans, what are the best tips for small business owners in rolling out a new health care plan?
According to industry experts, these actions steps should be high on the list of any business decision maker:
Opt for an underwriter
One of the best tips for small businesses is to explore plans that still allow medical underwriting. “Most these plans were eliminated under the Affordable Care Act, however a number of new programs are available through local and state Chambers of Commerce,” says Quinten Lovejoy, Insurance Risk Advisor at Crane Agency, in Cameron, Mo.
These programs allow employers under a certain size to join a self-funded insurance program that is comprised of similarly-sized companies, Lovejoy says. “The plans are medically underwritten with a defined stop-loss limit, and backed by reinsurance companies so as to assure the plan's financial sustainability,” he notes.
“For groups comprised of healthy employees, these medically-underwritten plans have proven to save anywhere between 8%-30% on premiums.”
Link up with a PEO
More and more small business owners are choosing to partner up with Professional Employer Organization (PEO) to offer a more generous package to their employees and to better control the rising cost of employee benefits.
“A PEO pools together thousands of companies and creates economies of scale and buying power, and thereby lowering the cost of employee related insurances,” says Shraga Jacobowitz, managing partner at ARC Consultants, an employee benefits specialist. “In addition, the PEO will ease the human resources burden on the business owner. Companies who partnered with a PEO are 25% less concerned about their ability to hire employees.”
Jacobowitz says that partnering with a PEO (Professional Employer Organization) on a new health care insurance plan will save you money, enhance your cash flow and streamline your business operations, thereby increasing efficiency and allowing business owners to solely focus on profit generating areas of his business.
“48% of companies that partnered with a PEO made that decision to lower healthcare benefit costs and companies that partner with a PEO save on average 21% on human resources and administration than companies that don’t use a PEO,” he says.
Do your due diligence
It’s vitally important that you check with your state on what health care plans are available and to ensure that employees will gain access to appropriate benefits,” says Soni. “There is no use in providing a health care plan that will not pay for the essential health care needs of your employee, and your state can point you in the right direction. There is also a federal government marketplace that can help you find the right health insurance program for your employees.
The Healthcare.gov small business web site can be a great resource for business owners in choosing the right plan, Soni adds.
Know the Law
If you’re a business with 50 or more full-time employees, you are required by The Affordable Care Act (ACA) to offer those full-time employees health insurance.
“The ACA minimum requirements state that offered health benefits can’t be too expensive for your employees or else you could incur fines of up to $3,000 per year per employee,” says Shobin Uralil, Co-Founder and COO at Lively, a San Francisco-based health savings account software provider. “If your company has fewer than 50 full-time employees but is part of a larger ownership organization that employees 50 or more people full-time, you are subject to the same requirements as a larger company.
Even if you have fewer than 50 employees, if you decide to offer health insurance, the plans must comply with ACA regulations, Uralil says.
Assess your Options
If you offered a plan last year, Uralil advises contacting your insurance and ask the following questions: Is my current plan scheduled to auto renew? Has the provider made any changes to my current plan for the following year? What other ACA-compliant plans are available in my price range?
“If you’ll be offering health insurance for the first time, contact an insurance broker and ask about your options for the coming year,” Uralil says. “If you have fewer than 25 full-time employees and you cover at least 50% of the premiums for those full-time employees, you’re eligible for a tax credit”
“Consequently, it might be worth discussing this with your accountant.”
Have a Backup Plan
If you have fewer than 50 full-time employees and can’t afford to offer a health plan, you can still contribute to their health care costs by offering a stipend for employees to purchase their own plans, Uralil notes.
Communicate with your employees
Small business owners, who have an existing plan, but are rolling out new health care insurance plans, should communicate all changes to your health insurance offerings with your employees at least a month before open enrollment starts.
“Even if you’ve decided to keep the current health plan, that plan provider has made no changes to coverage levels and employees’ costs will remain the same, you should communicate this to your workforce,” Uralil says.
The Takeaway on Small Businesses and New Health Care Plans
Small company owners are used to wearing multiple hats on the job, but choosing the right health care plan for staffers means really stretching their levels of expertise.
“Small business owners are most likely their own Human Resources Department,” says Uralil. “It’s up to them to decide on the kind of health insurance to offer employees, how much to contribute toward premiums or whether to offer health insurance at all.”