Having a successfully run small business derives from having employees who feel valued. One way to hire and retain valuable employees is by offering health insurance. However, these costs can add up. Luckily, there are ways to save on those costs without breaking the bank while still providing options for employees. It’s important to note that these options may change during new congressional sessions.
Small Business Health Options Program (SHOP)
The Small Business Health Options Program is a program under the Affordable Care Act in which the employer can enroll into a plan — Bronze, Silver, Gold, or Platinum — and allow employees to choose their own plan in a chosen category. These plans help the employer decide how much is being paid by the business, ranging from 90 percent to 60 percent, and the employee covers the rest. There’s also a loophole that can be used if the business has 25 employees or less, which is a great money-saver for small business owners. The SHOP tax credit applies to employers with 25 or fewer employees who pay less than $50,000 a year and also pay for at least half of the premiums. These credits increase with fewer employees. The IRS has more information pertaining to the credit, with a tax credit estimator available as well.
Businesses can also take advantage of privatized exchanges, or purchasing alliances. This works similar to SHOP, but without the tax credits. Instead, these plans may be of better quality or more competitively priced.
Direct Employees To Health Care Exchanges
It may sound odd to suggest not offering insurance, but this is a win for both the business and the employee. Under the Affordable Care Act, small businesses with 49 or fewer full-time employees are not required to offer health insurance. Provide information directing employees to search for plans via HealthCare.gov or to the individual state’s exchange if one exists. That way, under the law, employees can qualify for subsidies to lower the costs of premiums.
Employees who work for a business that does offer insurance do not qualify for these subsidies. Some larger businesses such as Walmart have eliminated offering insurance right away to part-time employees, less than 30 hours a week, making it easier for employees to be covered by the subsidies, and in turn, this option is often cheaper for the employee. These plans also can be better quality than what a small business might be able to afford. For small businesses with less than 50 employees, these rules apply to full-time employees as well.
Wellness Programs can expand by directing employees to the health care exchanges. In exchange for directing employees to buy plans through healthcare.gov or the state’s own exchange, preventative care measures can be offered to offset costs for the employee by taking better care of themselves. Offering a free gym membership is an incentive that can help health assessments, and in turn, have lower health care costs for the employee by preventing disease risk factors. Implementing disease management is also a wellness program staffed by nurses to aid with chronic illness such as asthma to help prevent expensive hospital stays. Disease management can also be coupled with insurance plans offered to help reduce potential costs.
This article was written by Chase Hunt for Small Business Pulse