Big changes are coming in the next year as the Affordable Care Act puts more mandates into place. Consumers and business owners can expect the full employer mandate to come into effect, fines and penalties to increase for individuals who opt to go without insurance, and premium rate hikes up to 50 percent with some insurance carriers.
With all these changes on the horizon, many small businesses are left wondering if they have any new options that allow them to offer insurance to employees without excessive costs.
Insurance Options for Small Businesses
The Affordable Care Act mandates that any business with over 49 full-time employees offer health a group health insurance policy to each employee and any dependents they have who are under the age of 26. Those businesses with less than 50 employees have the option to use the SHOP Marketplace, a group insurance policy, or an individual reimbursement plan.
- SHOP Marketplace – With the SHOP Marketplace, employers can offer either a medical plan, a dental plan or both. Employees can either select a specific plan within a category of coverage or the employer can select the plan from a private insurance company. The SHOP Marketplace does have a minimum participation rate, but in 2016, requirements are lowered to make it easier for businesses to utilize this plan.
- Group Health Insurance Policy – While group health policies may be more expensive than others, they are a valuable option for larger businesses. With a group insurance policy, the employer purchases the coverage and covers a minimum percentage rate of the cost. Group health policies offer valuable benefits to companies that need to provide insurance for a large number of participants.
- Individual Reimbursement Plans – The health insurance marketplace, or the Exchange, as it is commonly known, is the place where Americans can choose and customize their own insurance plans. Because these plans are often less expensive than a group policy, many employers are opting to reimburse employees for the costs of their insurance through an individual reimbursement plan. In this way, employers can take advantage of lower costs while still contributing to employee insurance premiums each month.
Depending on the size of your business and what you can afford to offer to your employees, one plan may work better than another. Benefits are an important part of keeping and retaining talent so your company can grow each year, and with the many options available, your business can contain costs while keeping employees happy.
Group health insurance policies, individual reimbursement plans and SHOP Marketplace plans are three insurance options that employers have to offer employees health insurance in 2016.
What plan will work for your small business? Leave a comment below.