Another update from the Jungle….

Michelle owns a small business of 35 employees that is slowly expanding. She’s ignored the Affordable Care Act (ACA) ever since she realized that her company was too small to be subject to the employer penalty. Besides, she has other concerns, such as finding new markets for her company so that it can continue to grow.

However, her employees like having benefits, including health coverage. Last year, Michelle encouraged her employees to obtain individual health policies because she couldn’t afford a group health plan. Now the issue has arisen again as the annual open enrollment period for the Exchange approaches on November 1^st.

Michelle would like to offer a group health plan because she thinks it would be a nice perk for employees. But she’s heard other small business owners complain about increased premium costs.
She’s afraid she can’t afford a group plan this year either.

She does a quick survey of her employees. She learns that 15 of them have coverage through their spouses. One employee is an early retiree covered under a former employer’s plan. Another employee is eligible for Medicare. Part-time workers wouldn’t be eligible for coverage in an employer’s group health plan under the ACA rules.

That leaves a grand total of 12 employees who are interested in a group health plan. Of the 12 employees, several could qualify for a subsidy from the Exchange based on their income and family size.

What should Michelle do next?

1. She can ignore the issue completely since her company is not subject to the employer penalty.
2. She can ask her insurance agent to give her information on a group health plan option for the 12 employees who are interested in coverage.
3. She can arrange for an insurance agent to come to her work place to help employees choose individual health policies, through the Exchange or outside the Exchange.

There are no easy solutions for small employers regarding health coverage. Small employers may find that not offering a group health plan actually helps their lower income employees to qualify for a subsidy through the Exchange. On the other hand, any employer offering a group health plan may use a business tax deduction to offset part of the cost of the plan. An experienced insurance agent or producer can help small employers assess their options.

If your company is struggling with HR issues, Corporate Compliance Risk Advisor can help you create HR policies that are appropriate for your company’s size and then serve as a resource to your staff as the policies are implemented.

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