Moving forward with healthcare reform starting in 2014 small businesses may want to consider another option to providing group health insurance coverage to officers and employees. Instead of offering a single group carrier plan with different plans many businesses are contemplating letting employees shop through the california state health insurance exchange.
If a business has less than 50 full-time employees which is classified as less than 30 hrs per week then no federal penalty will be assessed to the business regardless of whether coverage is offered. For small businesses who currently do not offer coverage then more than likely having employees seek their own coverage makes sense. Whether employees obtain coverage through the exchange and receive a subsidy does not impact the business whatsoever from either a tax or penalty perspective if less than 50 employees are employed.
For companies that offer current coverage then may want to consider going through the SHOP exchange which is an acronym for the state business health insurance exchange. This will allow businesses to see what kind of rates are available versus through each of the particular health carriers inside the exchange. Our office will provide both options for businesses including outside the exchange although rates and coverages will probably mirror each other over time. No tax credits or subsidies will be available unlike on the individual health exchange.
One approach may be to offer employees a stipend to go out into the marketplace and purchase coverage but only reimburse employees who prove they have bought insurance. The benefit of this option may be that employees get the exact coverage they want and carrier they prefer such as Kaiser. As owners already understand it is tough to please all employees since they have different opinions on the best protection for their family.
This route may actually reduce monthly expenses since individual coverage may be less than group coverage with no medical underwriting to decline any individual. The best route to take is to at least get an idea of rates for both individual and group coverage and also to find out potential healthcare subsidies to see if not only do healthcare premiums get reduced but if coverage and carrier flexibility is now an added value.
No need to make reduce employee hours to avoid penalties if you are a small business of less than 50 employees. Many choices to consider with the upcoming healthcare impementation in 2014. Please feel free to contact us with any questions on small group health insurance for companies under 50 employees by calling us toll free at 888-504-6171 or emailing us.
