Moving company insurance focus: Health care
With the November elections behind us, the Patient Protection and Affordable Care Act (PPACA) is moving forward full steam ahead. However, the way forward is anything but clear for many small business owners. When it comes to moving company insurance health care decisions, you have some tough decisions ahead regarding how you’ll operate and remain competitive in this evolving marketplace.
Five key moving company insurance and health care decisions:
- Will you offer benefits or opt out? If you have 49 or fewer full time equivalent employees, you have a choice – “pay or play” doesn’t apply to you. However, there are many factors to weight such as your ability to attract and retain talent, what your competitors are doing and how the health care benefits decision may impact your company’s morale and productivity. If you stop offering benefits to employees who are accustomed to them, will they expect a salary increase to offset the benefit decrease?
- Do you need to adjust your company’s benefit-eligibility and FTE thresholds? Beginning in 2014 health care reform dictates that the waiting period for new employees to be eligible for health care benefits must be 90 days or less. So, if your plan says that new employees are eligible for eligible for benefits after six months of employment, you may need to adjust your policy. Also, under health care reform, a full time equivalent employee is someone who works 30 or more hours per week. For those who rely heavily on part-time workers, the regulatory uncertainties can be especially worrisome. The federal government has yet to iron out just how they’ll determine whether an employee meets the 30-hour threshold, and just how seasonal and part-time workers with varying hours will be treated.
- Can you take advantage of tax incentives? One thing to keep in mind is that you may be eligible for tax credits if you offer health care coverage and have fewer than 24 employees. So if you face the choice of either increasing salaries OR providing benefits, paying for health care benefits may be advantageous when you consider the tax incentive.
- If you offer benefits, how will you maximize employee value? If you’re going to offer a plan, make it count. Figure out what matters most to your employee group and choose a plan that fits their needs. Look for carriers that offer extra value with online planning tools, wellness incentives and other resources. Also, keep in mind that health care reform requires individuals to purchase health care or pay a penalty. This mandate may mean than younger employee who weren’t concerned about health care benefits in the past may place higher value on the benefit now.
- How will your strategy match up to that of your competitors? According to a 2012 small business survey conducted by eHealthInsurance.com, 60 percent of small businesses (with fewer than 50 employees) plan to continue offering coverage for their employees in 2014. One-third of respondents (34 percent) said they might consider dropping employer-based group health insurance beginning in 2014. If they offer benefits and you don’t, how can you maintain your competitive advantage? If you offer benefits and they don’t, will they have the flexibility to undercut prices?
Summing it up
Many of PPACA’s requirements take effect in January of 2014. That means that moving companies have roughly one year to think, adapt and plan for changing health care requirements. Work closely with your health care insurance partner to understand your options. Change is never easy, but it often leads to new opportunities.
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