Healthcare Overview: Options and Resources
With the passage of the Patient Protection and Affordable Care Act, large employers (those with 50 or more employees) face new requirements to offer affordable health insurance to their employees. (For more on this topic, please see the article, “The Affordable Care Act.”) While smaller businesses are not required to offer health insurance, many owners will want to offer the benefit for the many reasons outlined below. Providing employee health insurance, however, still poses a challenge for small businesses. In fact, many small businesses lack enough workers to qualify for the best rates, so they forego providing coverage altogether.
To help secure more competitive rates, the healthcare reform law created the Small Business Health Options Program (SHOP), available in 2014 for employers with up to 50 employees (up to 100 employees in 2016) to purchase coverage through the online federal health insurance exchange. Other options are also available, such as joining groups and targeting plans designed for small companies, which has helped many business owners find the most comprehensive plan at the right price.
Why Offer Healthcare?
Public health research has found many reasons small business owners should provide some kind of healthcare coverage. Just a few are:
- Employee attraction and retention, including delayed retirement of key employees.
- Tax incentives to both the business owner and employees, such as a reduction in payroll taxes and the employee's ability to contribute toward insurance premiums with pre-tax dollars.
- Under the Affordable Care Act, small businesses with fewer than 25 employees that provide health insurance now may qualify for a small business tax credit of up to 35 percent (up to 25 percent for nonprofits) to offset premium costs.
- Better worker morale, resulting in increased productivity, as well as lower rates of absenteeism and worker's compensation claims.
A Look at the Options
Given that so many healthcare plans now exist, small business owners may find choosing the right program for their companies an overwhelming task. A key element to take into account is the individual situations of staff persons.
Plans can vary greatly regarding doctors, hospitals and medical groups serving those covered. Some people, particularly families and older individuals, who've developed histories with particular physicians, may be unhappy if they must change. On the other hand, young persons who come into a job with no insurance will likely appreciate the most basic plan.
Though many healthcare options are available, most employers select a Small-Group Major Medical policy. These programs include:
- Traditional or Indemnity Health Plans
- Health Maintenance Organization (HMO)
- Preferred Provider Organization (PPO),
- Exclusive Provider Organization (EPO)
- Point of Service (POS)
- Consumer-Driven Healthcare (CDHC)
See Small Group Insurance for descriptions of each product.
How a Broker Can Help
A small business owner who's also an insurance expert is a rare animal, so a healthcare broker's assistance can be a huge plus. Besides bringing a myriad of options to light, brokers can assist with legal and compliance issues.
Among these are the Health Insurance Portability and Accountability Act (HIPAA), the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Employee Retirement Income Security Act (ERISA), and other regulations pertinent to specific areas. Brokers also can help employees and the self-insured process claims and resolve related problems.
To find a reliable broker, start the process by talking with friends, relatives and colleagues. Other reliable sources include the local chamber of commerce and the Better Business Bureau.
The state insurance commissioner's web site is an excellent resource for specific details such as the broker's licensing information and records of consumer complaints. The National Association of Health Underwriters' (http://www.nahu.org) Internet site lists members as well as their offerings.
As a rule of thumb, select a fully-credentialed broker with at least five to 10 years of experience in the field.