A FEW YEARS BACK, I DID SOME WORK FOR AN EMPLOYEE BENEFITS’ COMPANY….BEFORE THE AFFORDABLE HEALTH CARE ACT WENT INTO EFFECT….I WAS CONTEMPLATING BEGINNING MY OWN BUSINESS WITH SOME FORMER COLLEAGUES AND I SPOKE TO THE COMPLIANCE ATTORNEY AT THE BENEFITS’ COMPANY ABOUT HEALTH INSURANCE FOR SMALL BUSINESSES (YES, ANOTHER LAWYER…CAN YOU BELIEVE IT? I DO KNOW SO VERY MANY) WHO INFORMED ME THAT HE HAD BEEN ‘STUDYING’ FOR ABOUT A YEAR AS TO WHAT KIND OF IMPACT THE ACA WOULD HAVE ON BUSINESSES…AT THAT TIME, HE WAS BAFFLED….I RECENTLY HEARD THAT HE STILL IS….SO, PRIOR TO YOU CONTINUING THIS BLOG, PLEASE KNOW THAT THIS IS THE MOST COMPLICATED TOPIC I’VE ENCOUNTERED IN THE HR FIELD AND I’M ONLY GOING TO GIVE YOU INFORMATION AS I TOTALLY UNDERSTAND IT….AT THE END OF THIS BLOG, I WILL GIVE YOU PHONE NUMBERS FOR THE PENNSYLVANIA INSURANCE DEPARTMENT AND SOMEONE THERE WILL (SHOULD) BE AN EXPERT ON SMALL BUSINESS HEALTH INSURANCE OPTIONS….
Businesses with fewer than 50 employees make up 98% of all businesses in the Commonwealth of Pennsylvania (997,243) and 77% of those (772,193) have no employees. These companies employ 2.4 million workers in Pennsylvania, roughly 38% of the state’s labor market. In 2012, only 48% reported they could afford to offer health insurance, and those that did were paying an average of 18% more than larger companies for it. Many small businesses offer High Deductible Health Plans (HDHP); enrollment in these plans has increased 500% in seven (7) years. By 2013, 58% of workers with individual coverage in small firms had a HDHP compared to 38% in larger firms and 28% in all firms. The larger the firm, the more likely the firm is able to offer health insurance as a benefit. The High Deductible Health Plans (HDHP) are more common in those smaller firms that offer coverage.
Small businesses with 50 employees or less do not have to provide coverage for employees. This is defined as 50 or fewer full time employees or full time equivalents (FTE’s – 100 or fewer part time workers). Seasonal workers are NOT considered, no matter how many hours they work…these workers can go onto the Marketplace as individuals in order to obtain insurance. This does NOT mean that a small business owner cannot provide coverage; the business owner may provide coverage; it means that the business owner is NOT required to provide coverage. A tax credit up to 35% (up to 50% in 2014) of premium costs is available to employers with fewer than 25 employees who cover at least 50% of workers’ health costs. There is another 25% credit available to non-profits.
If you have 2-50 employees, you are considered a small business. In 2016, if you have 2-100 employees, you will be considered a small business. You may also receive a tax credit for providing insurance to your employees for tax years beginning in 2014. A small business with an average annual wage of less than $50,000 may be eligible for a credit worth up to 50% (35% for non-profits) for up to two (2) consecutive years.
The SHOP (Small Business Health Options) exchange allows small business owners to purchase insurance for employees with greater bargaining power. In 2015, employers will be able to send employees to pick out coverage of choice….Those who can enter the Insurance Marketplace are small business owners and people paying more than 9.5% of their income on premiums. The SHOP website was part of the breakdown in communications with the overall Marketplace breakdown last year so all businesses were asked to apply with paper/pencil. The website is presently being tested in Delaware, Illinois, Missouri, New Jersey and Ohio ….it is scheduled to go live this Saturday, November 15th…There is still some question as to whether the SHOP will work; it may take years to analyze…If the system is working, more businesses will probably sign up….
Good employers, those who look at the long range and not those that dip into the ‘piggy bank’, still want to provide health care coverage to their employees…it is an incentive to obtain and maintain ‘good’ employees. However, if an employer gives the employee money toward health insurance, it is taxable to the employee and the employer is not permitted to take the expenditure as an ‘expense’….Most small businesses with 50 or fewer employees are still utilizing insurance brokers for their health care coverage. A good deal more expensive but the territory is familiar….
It also seems that a number of the major insurers are not selling plans through the SHOP programs…for example, in Nebraska, only two (2) insurers have plans on SHOP for Nebraska businesses….United Health Care and Coventry (a division of AETNA) have decided to stay out of the Nebraska SHOP. I did a ‘test’ on the system….I am domiciled in central Pennsylvania and I am gainfully covered by individual health insurance through the Marketplace, however, since I have my own business, I decided to see what kind of costs would be associated with a very, small business with two (2) employees….I used my age (62) and my daughter’s age (27…and she is gainfully covered by individual health insurance through the Marketplace as of this point in time) …there are 29 plans available for my ‘hypothetical’ two (2) person business…the players are HPMC (mostly western Pennsylvania), Highmark (a Blue Cross company) and Capital Blue Cross (primarily in central Pennsylvania).
The least expensive coverage I could find was a Highmark plan for $816.00/month (covering both individuals) with $4,000/deductible and coinsurance was 20% until the deductible was reached for anything other than those items provided for ‘free’ as part of the Affordable Care Act. Please remember that out-of-pocket for each individual….no matter what the cost of the plan on the Marketplace….is no more than $6,350.00 for 2014….$12,700 for families….this $816.00/month plan, covering two (2) employees, will have all the requisites of any other ACA plan…..however, my daughter and I have coverage at a far less individual cost that adds up to much less than $816.00/month for both of us. Now, about those tax credits...50% since the hypothetical company has fewer than 25 employees....I would need an accountant to help me with the numbers but it would probably look pretty inviting after all is said/done.....Complicated, yes.
Again, my advice up front for any small business is to contact your respective state insurance department or contact your insurance broker (maybe look at the plans available through the Marketplace and contact insurers directly). Please remember that any payments made for health insurance to benefit employees must be reported on the end of year W-2 form. This includes payment for the health insurance as well as any extra funds given to the employees for benefits. Another way that small businesses can give benefits to employees is to look at a Flexible Benefits’ package and give each employee a certain amount of monies to spend for benefits such as continuing education, health insurance, dental insurance, child care, wellness initiatives (gym memberships), etc. You may need to have a Benefits’ specialist evaluate the plan but it could help in the long run. Also, please remember to see a financial advisor or a health insurance broker prior to making any arrangements for expanded health care coverage for your employees.
Another great source of information for small businesses regarding the health insurance tax credits/incentives, requirements, timing, costs, etc. is the following link: www.obamacarefacts.com/obamacare-small-business/
If you have any questions that I may be able to help with, please email me, Rosanne Turczyn-Bennett, at info@scbhrserv.com or call SCB Services, LLC at 484-798-1236.
The contact information for the Pennsylvania Department of Insurance is 877-881-6388 and the contact number for the Small Business Division of the ACA Marketplace is 800-706-7893.
Small businesses with 50 employees or less do not have to provide coverage for employees. This is defined as 50 or fewer full time employees or full time equivalents (FTE’s – 100 or fewer part time workers). Seasonal workers are NOT considered, no matter how many hours they work…these workers can go onto the Marketplace as individuals in order to obtain insurance. This does NOT mean that a small business owner cannot provide coverage; the business owner may provide coverage; it means that the business owner is NOT required to provide coverage. A tax credit up to 35% (up to 50% in 2014) of premium costs is available to employers with fewer than 25 employees who cover at least 50% of workers’ health costs. There is another 25% credit available to non-profits.
If you have 2-50 employees, you are considered a small business. In 2016, if you have 2-100 employees, you will be considered a small business. You may also receive a tax credit for providing insurance to your employees for tax years beginning in 2014. A small business with an average annual wage of less than $50,000 may be eligible for a credit worth up to 50% (35% for non-profits) for up to two (2) consecutive years.
The SHOP (Small Business Health Options) exchange allows small business owners to purchase insurance for employees with greater bargaining power. In 2015, employers will be able to send employees to pick out coverage of choice….Those who can enter the Insurance Marketplace are small business owners and people paying more than 9.5% of their income on premiums. The SHOP website was part of the breakdown in communications with the overall Marketplace breakdown last year so all businesses were asked to apply with paper/pencil. The website is presently being tested in Delaware, Illinois, Missouri, New Jersey and Ohio ….it is scheduled to go live this Saturday, November 15th…There is still some question as to whether the SHOP will work; it may take years to analyze…If the system is working, more businesses will probably sign up….
Good employers, those who look at the long range and not those that dip into the ‘piggy bank’, still want to provide health care coverage to their employees…it is an incentive to obtain and maintain ‘good’ employees. However, if an employer gives the employee money toward health insurance, it is taxable to the employee and the employer is not permitted to take the expenditure as an ‘expense’….Most small businesses with 50 or fewer employees are still utilizing insurance brokers for their health care coverage. A good deal more expensive but the territory is familiar….
It also seems that a number of the major insurers are not selling plans through the SHOP programs…for example, in Nebraska, only two (2) insurers have plans on SHOP for Nebraska businesses….United Health Care and Coventry (a division of AETNA) have decided to stay out of the Nebraska SHOP. I did a ‘test’ on the system….I am domiciled in central Pennsylvania and I am gainfully covered by individual health insurance through the Marketplace, however, since I have my own business, I decided to see what kind of costs would be associated with a very, small business with two (2) employees….I used my age (62) and my daughter’s age (27…and she is gainfully covered by individual health insurance through the Marketplace as of this point in time) …there are 29 plans available for my ‘hypothetical’ two (2) person business…the players are HPMC (mostly western Pennsylvania), Highmark (a Blue Cross company) and Capital Blue Cross (primarily in central Pennsylvania).
The least expensive coverage I could find was a Highmark plan for $816.00/month (covering both individuals) with $4,000/deductible and coinsurance was 20% until the deductible was reached for anything other than those items provided for ‘free’ as part of the Affordable Care Act. Please remember that out-of-pocket for each individual….no matter what the cost of the plan on the Marketplace….is no more than $6,350.00 for 2014….$12,700 for families….this $816.00/month plan, covering two (2) employees, will have all the requisites of any other ACA plan…..however, my daughter and I have coverage at a far less individual cost that adds up to much less than $816.00/month for both of us. Now, about those tax credits...50% since the hypothetical company has fewer than 25 employees....I would need an accountant to help me with the numbers but it would probably look pretty inviting after all is said/done.....Complicated, yes.
Again, my advice up front for any small business is to contact your respective state insurance department or contact your insurance broker (maybe look at the plans available through the Marketplace and contact insurers directly). Please remember that any payments made for health insurance to benefit employees must be reported on the end of year W-2 form. This includes payment for the health insurance as well as any extra funds given to the employees for benefits. Another way that small businesses can give benefits to employees is to look at a Flexible Benefits’ package and give each employee a certain amount of monies to spend for benefits such as continuing education, health insurance, dental insurance, child care, wellness initiatives (gym memberships), etc. You may need to have a Benefits’ specialist evaluate the plan but it could help in the long run. Also, please remember to see a financial advisor or a health insurance broker prior to making any arrangements for expanded health care coverage for your employees.
Another great source of information for small businesses regarding the health insurance tax credits/incentives, requirements, timing, costs, etc. is the following link: www.obamacarefacts.com/obamacare-small-business/
If you have any questions that I may be able to help with, please email me, Rosanne Turczyn-Bennett, at info@scbhrserv.com or call SCB Services, LLC at 484-798-1236.
The contact information for the Pennsylvania Department of Insurance is 877-881-6388 and the contact number for the Small Business Division of the ACA Marketplace is 800-706-7893.
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