Health insurance question and small biz

12 years ago

We are a small business employer (6 full time) who in the past offered a medical reimbursement account ($2400/year per employee) in lieu of health insurance; however we can no longer do that in 2014 due to provisions of the ACA.
We are not eligible for any small business tax credits because our employees average wages are above the $50,000 mark.

So we are now looking into providing insurance for the employees thru the open market. It could double our cost if we provide full coverage. Two of the six already said they don't want it because they get it through their spouses employment. The other 4 do want it. How do other employers handle it when some want the benefit and others don't? Is it a take it or leave it? But then for the 2 that don't need it, it will be like a $2400 cut in pay because they could previously tap into the reimbursement funds. I don't think we want to up the salary of those two by the $2400 or the cost of the insurance, especially since I know some of the employees needing insurance would then say they want the money and not the insurance. Furthermore if we say we only want to cover 50 or 75% of the insurance premium I'm pretty sure some would say they don't want to pay the balance and therefore don't want to have the insurance.

We've never looked into providing insurance for a variety of reasons, but our pool of employees is limited so this offers a beneficial perk. Just need a little education on how other small businesses handle it so that it's fair for all.

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Comments (3)

lyfia
12 years ago
It is likely that those that get it through their spouse would no longer be eligible to do so if they were offered insurance through their employment all depends on that insurers rules.

Have you checked what the premiums would be? It has been a long time since I did this, but for my exes business we offered the employees full insurance and the cost was actually less than $2400/year per employee. I guess costs have gone up a lot in the last 12 years. It was an HMO, but it was really good coverage and no referrals needed.

I think in this case you don't really have much of a choice as to being able to make all employees happy. I don't think you can. In larger companies the choice is get the insurance or not - there is no other option. Guess you can only look at what the other options are for them as to if they went somewhere else what would they get. Maybe looking at what are the employees options elsewhere if they were to switch jobs would help you see if you need to offer something else or not.
golddust
12 years ago
We explored our options and decided to stop offering insurance. We held our employees hands to sign up for ACA and gave raises to compensate for the costs of their coverage.

The plans we were able to offer through our business plan turned out to be far less coverage than the plans on the open market. It was far more costly too.

Our open enrollment happened in October. We didn't sign on to keeping our small business plan but asked our agent not to state our intent until we were sure. We kept coverage through this month.

The ACA works especially well for small businesses, in my experience. Good luck. It's late to be investigating your options.
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hilltop_gw
Original Author
12 years ago
I've checked with our local insurer and BCBS would average about $4000 per employee for a $1500 deductible. Still waiting on a quote from another insurer.

Yes, probably should make sure that the two employees can still get insurance on their spouse's plan as many are dropping the family/extended coverage. Or if they're paying for it (fully or partially) through the spouses plan and realize they'll lose out in full if they don't take our plan, perhaps they'll opt in here.