New health care laws under the Affordable Care Act (ACA) are causing sweeping changes to America’s health insurance system and employer-provided insurance plans. While large businesses have received most of the media attention surrounding the new laws and how their implementation will affect enterprises, small businesses could actually find it more difficult to navigate the new waters around the ACA.
The licensed insurance agents at HealthMarkets Insurance Agency understand the uncertainty that can surround a small to mid level enterprise during this process. Below, you’ll find some information about changes to the health care system.
Do small businesses have to provide coverage to their employees?
No employer has to offer healthcare to its employees, although beginning January 1, 2015, some businesses with more than 50 full-time employees who don’t offer insurance, or whose coverage doesn’t meet certain minimum standards, may be subject to the Employer Shared Responsibility Payment.
No employer with fewer than 50 full-time employees is subject to the Employer Shared Responsibility Payment in any year. However, offering benefits to workers–like health insurance–can be one of the most attractive ways to hire and maintain talent. HealthMarkets can help business owners be aware of their options to provide cost-effective coverage for their employees.
How can small businesses provide coverage through the marketplace?
Businesses with 50 or fewer full-time-equivalent employees may use the Small Business Health Options Program (SHOP) Marketplace, operated in each state’s Marketplace. SHOP can help small businesses and self-employed entrepreneurs gain coverage.
To participate in SHOP, owners must have a principal business address within the state where they plan to buy coverage, have at least one common-law employee on payroll (not including a sole proprietor or spouse), and have the proper number of full-time workers. If the enterprise has fewer than 25 employees, it may also qualify for tax credits if insurance is bought through SHOP.
This process can begin at any time of year for businesses that qualify, and coverage can begin as soon as the first of the month if the process is complete before the 15th of the previous calendar month.
Are the plans available through SHOP different from Marketplace plans?
Although SHOP is only offered to businesses with fewer than 50 employees, it uses the same basic structure as other ACA plans. There are four types of coverage, all labeled in the same way as the regular Marketplace plans: Bronze, Silver, Gold and Platinum. These names have nothing to do with the quality of coverage, but explain the way in which premiums, deductibles and copayments are set and paid.
All plans offered through SHOP must provide a set of essential health benefits, and they all cover pre-existing conditions and many free preventive services. Business owners can decide at the beginning exactly how much to contribute toward their employees’ premium costs, so they have control over the company’s health coverage spending from start to finish.
What is the difference between the plan types?
The four different types of insurance (Bronze, Silver, Gold and Platinum) represent different ways for individuals to share and balance their premiums and out-of-pocket expenses. Generally, Bronze plans will have low premiums but relatively high out-of-pocket expenses, and a Platinum plan will have higher premiums but much lower deductibles and copayments.
Individuals who will use their coverage often or might experience a major health crisis will likely be better suited for a Platinum or Gold plan so they may control their costs and stay protected from high out-of-pocket expenses. Conversely, a Bronze or Silver plan is better suited for those who want some coverage, but who might not use it as much and therefore aren’t as concerned with financial loss.
In general, remember this: the lower the premium, the higher the out-of-pocket costs, and the higher the premium, the lower the out-of-pocket costs.
Small business owners who are looking into providing health insurance for their employees can be overwhelmed by the amount of information available. Contact a licensed insurance agent at HealthMarkets for answers to your questions and information about the options that are available to you.