Group Health Plan

It’s Back Again!

Another update from the Jungle….

unnamed (11)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 1st.

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.
image038She’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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Are you ready for 2015?

Another update from the HR jungle…

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Sue is the human resources director for her company (because she’s the only HR department employee). She is frantically working her way through her year-end checklist so that she can take a two week, rum-infused holiday cruise in late December. Today she’s working on checklist items related to the group health plan.

First on her checklist is a note to update the on-line information about the company’s group health plan to show the new out-of-pocket limits for 2015. Her company has a high deductible health plan (HDHP) with a health savings account (HSA). In 2015, HSA contributions are limited to $3,350 for individuals and $6,650 for families. The maximum out-of-pocket limits are $6,450 for individuals and $12,900 for families. If she posts the information on-line, some employees may actually read it rather than calling her with their questions.

Second on her checklist is to confirm that the new ACA-compliant software is properly tracking the hours of employees. Sue was impressed by the software vendor’s ability to customize the software to track her company’s high turnover employees. Sue’s company is not subject to the employer penalty in 2015 because they met the transitional relief for employers with 50 – 99 employees. But Sue still worries about last minute glitches when new software programs are implemented.

Does your ACA-compliance checklist look like Sue’s? Can you think of any items on your checklist that Sue has forgotten?

Sue’s already dreaming about the rum and fruit drinks she’ll be enjoying on her cruise, but she’ll continue working on her checklist items in next week’s column.

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Pay Now or Pay Later.

Another update from the HR jungle….

9098832-a-set-of-tools-for-repairs-vector-illustrationBarb owns a small home repair business with six employees. She pays them wages higher than the industry average so that they won’t defect to larger competitors who can offer more benefits. She’d like to add a group health plan as another incentive to remain loyal to her company.

But, once again, the health insurance quotes Barb received gives her sticker shock. There’s no way she can pay the employer’s portion of the premium for a group health plan. She’s already paying a fortune for her worker compensation premiums.

She knows her employees can’t afford the employee’s portion of the premium on a group health plan. Don Juan Smith’s paycheck is subject to the maximum allowed payroll deductions due to the court-ordered child support he owes to two girlfriends. High Risk Randy’s wages are being garnished for old debts and he’s never paid voluntarily for any employee benefit.

What options are available to Barb?

  1. She can remind her employees that annual open enrollment for the Exchange (a/k/a Marketplace) began on November 15th. They can apply for individual health policies or apply for an individual exemption to the requirement of having health insurance.
  2. She can tell her employees to talk to a health insurance agent about coverage options for the employee or for the employee’s family.

Is your business struggling to understand the Affordable Care Act and how it affects your company and employees? Corporate Compliance Risk Advisor can provide an overview of how the ACA affects employers and employees and answer specific questions you may have.

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Private Exchanges and the Small Employer.

Another update from the HR jungle….

Dorothy runs a small retail business with 8 employees. It’s a low margin business so there’s not much room for employee perks. Dorothy always wanted to offer a group health plan to her employees but could never afford it. She had high hopes of lower premiums under the Affordable Care Act (ACA or Obamacare) but after looking at a couple of quotes she doubts if she can ever afford a group health plan for her employees.

Recently at a business networking event, Dorothy learned that a local hospital chain is teaming up with the largest health insurance company in the area to offer a private Exchange. A private Exchange does not offer premium and cost sharing subsidies like the public Exchange (a/k/a Marketplace). But a private Exchange offers some financial certainty to employers.

A private Exchange allows an employer to contribute a fixed dollar amount toward the cost of health coverage. Employees can then “buy up” to a higher premium level of health plan if they want lower deductibles or co-pays.

What options are available to Dorothy?

1. She can contribute a fixed dollar amount that covers the employee-only premium at a bronze plan level. Employees would be responsible for paying the premium for their family members added as dependents.
2. She can pay employees a bit more in wages and allow them to sort out their health coverage options.
3. She can continue doing nothing monetarily but encourage her employees to apply for individual coverage via the Healthcare Exchange (a/k/a Marketplace) in hopes they may qualify for some of the subsidies it offers to lower income individuals.

Is your company struggling to understand how the ACA will affect the employee group health plan? Corporate Compliance Risk Advisor can help you grasp the basics of the ACA and how it affects an employer of your company’s size.

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Doing the Right Thing under the ACA.

Another update from the HR jungle….

Cindy owns a small business that has 6 employees. She would love to offer health insurance to her employees but has found it too expensive in the past. Instead, she raised wages slightly and encouraged her employees to buy individual coverage.

When Cindy first heard about the Affordable Care Act (ACA or Obamacare) she was excited about the possibilities. Early reports were that small employers like her company might finally be able to afford a group health plan. The Small Business Health Option Program (SHOP) would have standardized plans, making it easier to compare coverage. The SHOP was also supposed to allow small employers to offer more than one health plan option to employees.

Alas, the SHOP is part of the Healthcare Exchange or Marketplace. The roll out of the Individual Exchange was such a mess that all the most attractive features of the SHOP were delayed. Another year has gone by and open enrollment in (and outside) the Exchange will soon start. Cindy is pondering her choices.

What options are available to Cindy?

1. She could work with her insurance agent to apply for a group health plan via the SHOP, even though the coverage options are limited.
2. She could work with her insurance agent to apply for a group health plan outside the SHOP where there are more coverage options available from more insurers.
3. She could continue doing what she currently does, which is to increase her employees’ pay and encourage them to obtain individual coverage.

Is your company struggling to understand how the ACA will affect the employee group health plan? Corporate Compliance Risk Advisor can help you grasp the basics of the ACA and how it affects an employer of your company’s size.

Join the HR Compliance Jungle today. Click here!

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Pay Raises v. Health Insurance

Another update from the HR jungle….

Pete has a small company with 12 employees, many of whom are also related to him. Running a business with lots of family is not easy. (Who knew that Aunt Martha’s feud with Uncle Les would still be an issue after 50 years?) Pete figures the best way to keep everyone happy is to offer good pay and benefits.

One of the benefits he’s always wanted to offer is a group health plan. Pete gave up on a group plan for employees after his nephew had surgery and the rates on the group plan shot through the roof. Back when employees were risk-rated based on health factors, his nephew and a couple of other less healthy employees guaranteed that the premium increased dramatically each year.

Pete knows that under the Affordable Care Act (ACA or Obamacare) small group plans with less than 50 employees are no longer risk-rated. Instead, the premium is based on the age of each participant, geographic location, family size (number of individuals covered), and tobacco use. So Pete decides to ask his insurance agent for a quote on a group health plan for his employees.

Pete gets sticker shock again when he sees the amount of the premium. He knows that he simply can’t afford to offer a group health plan. Still, he wants to do something for his employees.

What options are available to Pete?

1. He can tell employees that no pay raises will be given this year so that he can offer a group health plan.
2. He can go ahead with his plan to give pay raises and let his employees buy individual health policies. He hopes some will qualify for the subsidies offered by the Healthcare Exchange (a/k/a Marketplace).
3. He can give each employee a set amount of money, in lieu of a pay raise, that would cover employee-only health insurance on a low cost bronze plan (bought via the Exchange or directly from the insurer).

Is your company struggling to understand how the ACA will affect the employee group health plan? Corporate Compliance Risk Advisor can help you grasp the basics of the ACA and how it affects an employer of your company’s size.

Join the HR Compliance Jungle today. Click here!

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Visit us: http://www.complianceriskadvisor.com/