As a small business owner, you might want to offer health insurance to your employees. But you might not be able to afford the employer contribution to the group health plan. Not only will this not be ideal for your employees, but it has the potential to impact your employee recruitment and retention. Without enough employees and revenue, you might not meet the requirements to purchase a group health insurance plan.
But when the ACA (Affordable Care Act) was implemented, small businesses were permitted a special ACA open enrollment period that waives many of the general requirements for group health insurance — plans often offered by an employer. This special enrollment period occurs between November 15 and December 15.
If you can’t meet the requirements for small group health insurance, you may qualify for the small group ACA open enrollment period.
General Group Coverage Requirements vs. ACA Open Enrollment for Small Groups
Usually, a business must meet certain requirements to qualify for a group health insurance policy. Most insurance carriers require over 70% of eligible employees to enroll in the group plan before offering coverage. Many insurance carriers also require the employer to contribute a certain percentage — anywhere from 50%-80% of the employee plan.
This list of general requirements for group health insurance may strain some small businesses who want to offer an employee health plan.
The ACA open enrollment period waives these requirements for small businesses. Now qualifying small businesses can enroll in a group health insurance plan without paying the required contribution or employee participation.
Employers can pay any portion of the health insurance premiums. Further, the number of people choosing to participate in the policy does not matter.
General Group Coverage Requirements:
- The Participation Requirement: often 70% or more of the eligible employees must enroll in the group health plan. This can be difficult for many small businesses since some employees may choose to opt-out of the health plan.
- The Employer-Contribution Requirement: many employers struggle to offer the often required 50-80% they are required to contribute to the group health plans. If you want to require all your employees to participate in the health plan, you must contribute 100% of the funds.
Special Small Group ACA Open Enrollment Period Requirements:
- Groups must still be a business. An owner (and spouse) only policy would not qualify for a small group health plan.
- Must have at least 2 employees enroll to be considered a group. One must be at least a regular W-2 employee.
- Must have less than 50 employees to be considered a small group. In CA, NY, VT, and CO define the qualifying small business as between 2 and 100 employees.
- Must enroll during ACA open enrollment for small groups — November 15th-December 15th. Then the plan becomes effective on January 1st.
After you enroll in the small-group plan in the ACA open enrollment period, any new employees can join throughout the year. Any already existing employees can join during a normal open enrollment period or use a qualifying life event.
In a nutshell, if you can’t afford the group health insurance as normally offered by an insurance carrier, ACA open enrollment might provide you a viable solution.
You no longer have to worry about the large employer-contribution — you can contribute whatever you can afford. And you no longer have to worry about large employee participation. But now you can still offer affordable health insurance to your employees.
If you have further questions about the logistics and procedures surrounding small group health insurance and ACA open enrollment, please contact Semel Risk Consultants — local to the Reno and Las Vegas areas.
But Why Offer Small Group Health Insurance through ACA Open Enrollment?
But you might be wondering, even if you could afford to partially cover your employees health benefits through ACA open enrollment, why should you take advantage of it. After all, you may only be able to afford minimal employer-contributions.
If you want a steady, loyal, and satisfied group of employees, health benefits are often the way to go. And ACA open enrollment gives you an affordable way to provide them. While you might contribute a small portion as allowed by the ACA open enrollment, you increase the attractiveness of the workplace, which ultimately has the potential to increase your revenues.
By offering your employees health benefits, there are multiple benefits to you — the employer.
- Better Access to Care for your Employees:
- Manageable Employee Costs and Financial Security
- Tax Benefits for Your Business
- Better Employee Recruitment and Retention
Better Access to Care
When your employees have better access to care, their satisfaction in their workplace will be higher. Health coverage helps them actively maintain their health. This may prevent more serious harm. If your employees remain healthy, they can remain active and present on the job site.
Manageable Employee Costs and Security
When your employees can afford emergencies because of health insurance, there is no immediate pressure from debts caused by medical emergencies. Besides giving an employee financial security, this also reduces pressure to find a different job that would in the future help cover such medical debt.
Tax Benefits for Your Business
In addition to the normal business, tax write off of supplying your employees with health insurance, those eligible for the ACA open enrollment for small groups are eligible for additional tax breaks.
Further, you can reduce the employees’ taxes by taking their contribution portions prior to their take-home pay.
Higher Employee Recruitment and Retention
Finally, you are more likely to attract higher-performing employees and keep them more focused and attentive to the job. This happens in multiple ways:
- Reduce employee higher and training costs by retaining your employees through health benefits.
- Decrease poor health and, hence, absenteeism in the long run with your employees.
- Improve the attitude in the office — employees are happier when they are healthier.
A survey of small business owners returned the following results on the positive effects of health insurance:
- 78% observed increased loyalty and lower turnover.
- 75% noticed better employee recruitment.
- 64% observed increased productivity.
- 62% found that most employees expected health insurance.
- 58% found employees were more present because they remained healthy.
All in all, if you can’t afford to meet the normal eligibility requirements, ACA open enrollment allows you the ability to also gain these positive effects of health insurance for your employees and your business.
ACA Open Enrollment Season: Let Semel Risk Consultants Help Your Business
As we approach the next ACA open enrollment season for small groups, you may have further questions. The sooner you investigate, the more likely you can gain health insurance for your employees. Don’t miss your window of opportunity — November 15th to December 15th. Semel Risk Consultants is here in Reno and Las Vegas to help you find the right contribution amount and plan during this upcoming ACA open enrollment season for small groups.
