3 Questions that allows you to Wonder About Employee Health Care

employee health

Small businesses face important decisions about employee benefits, and as deadlines for reasonable Care Act (ACA) requirements draw near, timing is of the essence.

You should consider right here three inquiries to make more informed decisions to your workforce.

1. Should you offer employer provided coverage or not?

It’s commonly agreed upon by both employers and employees that health benefits play an important role in employee satisfaction. Really, in response to the 2013 Aflac WorkForces Report, 78 percent of employees say their benefits package is essential to their job satisfaction, and 65 percent say it is very important employer loyalty.

Deciding whether you’ll offer coverage on your workforce is a decision that has effects on greater than just your final analysis; it also affects employee morale and retention.

View employer-sponsored benefits options as a value-effective thanks to boost employee compensation. If you’re an employer with fewer than 50 full-time equivalent employees, you won’t be penalized for not offering a health plan. But you ought to, nonetheless, bear in mind the qualitative and quantitative values of advantages:

  • Qualitative Value: Health benefit options are the way to demonstrate that you just care about your employees and to maintain morale high.
  • Quantitative Value: Considering the recruiting, training and general cost of resources to interchange an employee, it may be in small businesses’ best interest to offer medical health insurance, particularly since 65 percent of employees said their benefits options impact their loyalty to their employer.

2. How much can your corporation afford to spend?

Before you progress ahead in making benefit options available on your employees, you’ll have to assess what you can still afford to speculate.

If you provide your workforce with employer-sponsored benefit options, you can have already got this cost budgeted for the approaching years. However, keep in mind to think about projected increases in health care costs and your potential eligibility to exploit the Small Business Health Options Program (SHOP) Marketplace in 2014.

Is it your first time offering employer-sponsored benefits options? Don’t worry. You may discuss options together with your benefits consultant or broker to get a professional opinion that will help you weigh the charges. Remember the fact that a broker or agent is a resource and can be there to reply questions for you within the implementation process and beyond.

Here’s an example assessment: In 2013, health care costs are expected  (PDF) to extend per employee by 5.3 percent (0.6 percent less than in 2012).  You can use cost estimates to establish approximately how much it’s going to cost per employee, in addition to potential penalties starting in 2015 for not providing employee health coverage. You also can estimate your eligibility for small business tax credits to assist defray the fees related to health care coverage.

3. Which strategy for those who choose as a small business owner?

You’ve decided to make benefit options available in your employees. Now the question is, what approach will you’re taking? You’ve got options. Let’s move through them:

Adjust Your Current Health Plan

Work along with your broker or benefits consultant to know how your current benefit options work within new ACA standards  (PDF). Understand that your employees can be eligible for tax subsidies during the Medical insurance Marketplace . This can be the case if their required contribution to employer-sponsored medical insurance exceeds 9.5 percent in their annual gross income or if the plan pays lower than 60 percent of covered health expenses.

The Medical insurance Marketplace

Also referred to as an exchange, the medical insurance marketplace is predicted to present small businesses and individuals competitive benefits options. Small businesses participating in the stores can be eligible for a tax credit of as much as 50 percent in their premium payments in the event that they have 25 or fewer full-time employees whose average wages don’t exceed $50,000 per year.

Self-Funded Model

This is when an organization is accountable for covering the claims in a health care plan. Employers can save costs concerning premium taxes and state insurance regulations because these plans aren’t included in some ACA requirements.

These plans typically shift additional costs to employees, especially when an employer’s workforce has significant health care needs. Companies will need to consider adding stop-loss coverage to deal with for annual and lifelong dollar limit restrictions.

Defined Contribution Model

This model enables employers to offer their employees a hard and fast sum of money and a catalogue of medical health insurance options. It helps employers keep costs predictable while also enabling employees to create plans that meet their needs. Defined contribution models require employees to be well-informed about health care.

While the above is meant to produce general information regarding an evolving topic, it would not constitute legal, tax or accounting advice regarding any specific situation. I strongly encourage you to debate your HCR situation along with your advisor to see the actions it is advisable take, or to go to HealthCare.gov for more information.

Question Yourself Photo via Shutterstock

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