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May 30, 2015

Hot Topic: Employee Healthcare

Posted by Matt Beuschlein

Spending money is right up there with spiders and Mondays, everyone has to deal with them at one time or another, but no one wants to. With the new healthcare changes, people are being forced to do at least one of those things..

Business owners and consumers alike are either getting insured or facing penalties. As consumers all filed taxes last month, many felt the pressure of that new healthcare penalty, which starts at $95 or 1% of income for those who didn’t have health insurance, but will gradually rise to 2.5% or $695 per person by 2016.

While consumers are weighing out penalties, small businesses are facing healthcare changes of their own. As a business owner, is it better to offer healthcare to employees or bite the bullet and pay the penalties?

ObamaCare_Small_Business_HealthCare_Blog_BizX

The Patient Protection and Affordable Care Act (PPACA), or often referred to as "ObamaCare,” was enacted in 2010 to lower the number of uninsured Americans by offering affordable health insurance options.

The Consumer Side of ObamaCare

The idea behind PPACA is that consumers are able to take charge of their healthcare, with more options and more flexibility. Under the act, consumers no longer have to stress about preexisting conditions and younger adults can stay covered under their parents’ insurance until the age of 26, just a few of the benefits under the new legislation.

ObamaCare for Small Businesses

Five years after the law was enacted, small businesses across the country are just starting to feel the impact of the legislation. In California, those small businesses that were able to keep their own insurance offerings, will now have to phase those out by the end of this year in favor of a plan that meets the new PPACA requirements.

So, what might the financial impact of this change look like? For one Santa Monica e-commerce company, ZipfWorks, when implementing a new plan that complied with the health reform law its insurance premiums for its 18 full-time employees rose nearly 30%.Healthcare_BizX_Blog_Obamacare

The premium increase may be intimidating, but remember that small businesses with 50 or less employees are not required to offer their employees health insurance.

For employees whose employers don’t offer health plans, sites like Covered California and Washington Health Plan Finder or eHealthInsurance or Healthcare.gov can help them navigate their options and apply for coverage online.

Interested in finding insurance plans that comply with the new legislation? Businesses with 50 or fewer employees can utilize the SHOP (Small Business Health Options) exchange, where you can shop for appropriate healthcare plans.

Benefits to Providing Health Insurance to Your Employees

Access to top talent. Healthcare options are important to employees when evaluating employers. By providing competitive healthcare options, you can ensure you’ll find serious applicants and be able to secure dedicated employees.

Access to tax credits. If you have less than 25 employees with average annual salaries of less than $50,000 per year, you may qualify for tax credits. To calculate your potential tax credit, visit http://www.smallbusinessmajority.org/tax-credit-calculator/.

Maybe offering health insurance is no longer within your budget given the new legislation, but you still want to offer your employees health benefits.

One option is to leverage “employee leasing,” where a professional employer organization (PEO) is responsible for the HR aspects of the employment relationship, including healthcare coverage, but the employee is officially working for your company and managed by you.

Once you have a great team put together, you want to keep them happy and healthy. Providing health insurance to your employees is a great way to boost employee morale, keep productivity levels up and help with retention.Healthcare_Obamacare_BizX_Blog


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