Question: My small company (under 50 full-timers) already provides health insurance for our employees. Now that the annual open enrollment period is coming up, is there anything special we need to do for Obamacare or to help our employees with the transition?
Answer: If you’re happy with your company insurance plan and feel that providing health benefits is a competitive advantage for your company, as well as the right thing for your employees, there’s nothing special you need to do for open enrollment. In fact, many insurance companies are offering discounts to clients who renew their policies now, so that might be something you could take advantage of this year.
You should have already sent out notices to your employees informing them about the new health insurance marketplaces. And it’s certainly a smart idea to document that you have fewer than 50 full-time employees (or their equivalent in part-timers) and that your business is therefore not mandated to offer insurance under the Affordable Care Act, says Shelby George, a practice leader in benefits solutions at asset manager Manning & Napier (MN) in Fairport, N.Y.. Even though you do offer insurance, you may one day need that documentation for audit purposes.
The health insurance reform act makes many complex changes to existing law, but the vast majority of Americans will continue to get coverage through their employer-sponsored insurance plans in the near future, Michael Gomes, a senior vice president at Dallas-based employee benefits and payroll provider BenefitMall, writes in an e-mail. “If the plan you offer is affordable and valuable, then it is likely a better option for the majority of your employees” than buying insurance as individuals on the online Obamacare marketplaces.
If your employees are confused by some of the rhetoric surrounding the ACA, you could help ease their concerns with some basic information, Gomes writes:
“I suggest focusing heavily on communication and education to employees. This communication should be about the benefits you offer, what is and isn’t included, and the availability of the marketplaces. Keeping employees informed, letting them know they aren’t alone in this, and clearly explaining their options will go a long way to ensuring they get the health benefits that best meet their needs.”
Although you are not under any pressure to make changes, this could be a good time for you to research your long-term options under the new health-care landscape, George says. Particularly with the rising cost of providing insurance for your employees, you might do a competitive analysis to determine whether offering insurance is the norm for your industry. Could you retain valued employees and save money if you drop your policy and give employees additional compensation that they could use to buy their own insurance through an Obamacare marketplace? What do the exchange prices look like in your state, and would many of your employees qualify for government subsidies that would lower their cost?
Small business insurance marketplaces, called SHOPs, are expected to begin selling small group policies in November after being delayed by a month. Would that alternative save you some expense without sacrificing quality of coverage? There are also myriad tax implications to consider, George notes, both for your company and for your employees.
“There are so many moving parts to health-care reform that these decisions can only be made on an individual basis,” she says. “The trap for employers is that they may rely only on what their insurance broker tells them, or make a decision based on something the CFO or CEO heard” that is inaccurate.
Julia Hutchins is facing many of those decisions herself, as a chief executive officer of Colorado HealthOP, a Denver insurance cooperative that started 18 months ago to sell coverage on the Colorado health insurance exchange. “We have 30 employees and last year decided to purchase a group health plan,” Hutchins says. “We’re all insurance geeks—we know this stuff—but it’s not easy for us either. We’re struggling with the same challenges everyone else is.”
The time and effort it takes to navigate the expanded choices that small employers now have when it comes to benefits should not be underestimated, Hutchins says. She recommends getting professional help from an accountant (or another expert who is not trying to sell you something) who can lay out your coverage choices. Along with the implications for your bottom line, don’t forget to take into account how changes will affect your employees. Some may feel very strongly about keeping their existing doctors and health plans, while others may be happier buying their own insurance policies, tailored to their health needs, and knowing they can keep that coverage even if they leave your company.
Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.