With all the new regulations regarding employer health insurance costs, there seem to be two main questions for small business owners.
Primarily, small business owners want to know:
As a small business owner, do I need to offer health insurance to my employees?
The Patient Protection and Affordable Care Act requires that beginning in 2015, employers with more than 50 full-time employees, or a combination of 50 full-time and full-time equivalent employees, must offer an employer-sponsored health care plan that meets minimum value and affordability standards — or the employer will be assessed a penalty for employees who are receiving a tax credit or cost-sharing reduction to obtain health care coverage. (old link)
This is a very complex matter. It is important that you consult a tax professional to be sure that you are making the best decision for your company.
And the second question is:
Even if I am not required to offer health insurance, should I?
If you do decide to provide health
care benefits even though it is not government mandated, you will want to take
certain things into consideration. You will want to determine which is the best
plan to offer, and to whom you will be offering this plan.
For example, will your insurance be offered to all of your employees, or only
to your full-time staff? You will also need to determine how long a new
employee will need to remain on staff until they are eligible for the plan.
There are many other considerations that need to be reviewed before you take
this major step. However, once rules are enacted they should be strictly and
consistently followed.
Here are some thoughts to consider regarding offering health insurance.
• There are many benefits to a company for offering health insurance. Health insurance is regarded by many potential employees as the most important benefit that a prospective employer can offer. Some businesses feel that they need to offer health care benefits if they want to recruit the best employees. Your company wants to stay competitive when it comes to recruiting the best candidates, so it is good to know which benefits your local competitors are offering.
• As a business owner, you too can take advantage of being part of a group medical plan.
• You may be eligible for a
tax-credit if your company has fewer than 25 employees and you provide health
insurance for your employees. Or you may decide to offer your employees the
opportunity to obtain group rates through your business.
• By offering a health care plan, workers can take advantage of preventive
health care programs. Having healthier workers will help your small business in
terms of fewer sick days taken. Also, it is most likely that you will have more
productive employees.
Some of the downsides to offering a company health insurance plan include:
• Offering health care for small employers can be very expensive;
• There is a lot of administrative work connected to offering health care;
• There can be potential liability for offering a defective health care provider.
Are you leaving money on the table?
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