Ensuring your employees have good healthcare coverage goes a long way to making sure they’re healthy and happy — and that in turn reduces absenteeism, enhances productivity and reduces retention. So, if you’re thinking about providing healthcare coverage for your employees, what do you need to know?
Reach out to Grand Mutual Insurance today to learn what your options are for personalized coverage for both individuals and companies.
Why Provide Healthcare Coverage?
Let’s begin by examining the reasons for providing healthcare coverage.
First of all, if you employ 50 or more full-time employees, you’re required by law to provide healthcare coverage to them — otherwise you risk having to pay substantial penalties. According to Healthinsurance.org, penalties are triggered if one or more employees apply for coverage in the healthcare exchange and are awarded premium subsidies. In 2018, penalties only apply after the first 30 employees and amount to $2,320 for each subsequent full-time employee. That means that if you have 75 employees, and don’t offer healthcare coverage and a penalty is triggered, your penalty would be 45 x $2,320 = $104,400.
Second, even if you employ fewer than 50 people, you may want to offer healthcare coverage as a part of your benefits package. This can help make your company more attractive to skilled workers who, in the current labor market where there’s a shortage of quality talent, could just as easily accept a position with one of your competitors.
Selecting a Plan: How Much to Spend and What Should Be Covered?
Of course, providing healthcare coverage for your employees can be an expensive endeavor. That’s why it’s wise to spend some time determining how much you can budget for this. In general, it’s acceptable to offer each employee 50 percent of their premium for a plan. Some companies opt to contribute more, however.
According to the 2010 health reform legislation, all small group plans, as well as individual plans, must offer coverage for the following essential services:
- Ambulatory services
- Hospitalization
- Emergency care
- Prescription drugs
- Laboratory tests
- Maternity and newborn care
- Mental health and substance abuse care
- Chronic disease management and preventive services
- Rehabilitative services and habilitative services
- Pediatric services
It can be helpful to know that there are also incentives to promote wellness programs in the workplace. If you offer a qualifying program, you may receive a reward of between 20 and 30 percent of the cost of coverage — and if a program is designed to reduce or prevent the use of tobacco, the maximum reward is 50 percent.
Note that as HealthCare.gov advises, once you provide insurance, you’re required to offer it to all eligible workers within 90 days of the commencement of their employment. In addition, you should provide a Summary of Benefits and Coverage form — or SBC form — that outlines their health plan and the associated costs. Failure to do this could result in a penalty.
Do You Qualify for a Federal Tax Credit?
According to the IRS, if you purchase coverage through the Small Business Health Options Program (SHOP), contribute a minimum of 50 percent to your employees’ premiums, have fewer than 25 full-time employees and pay them on average less than $50,000 per year, you may be eligible for a federal tax credit. For-profit employers can receive a credit of up to 50 percent of premium expenses. That number is 35 percent for tax-exempt employers.
Grand Mutual Insurance
For more information about providing affordable, comprehensive healthcare coverage for your employees and whether you qualify for a tax credit, contact Grand Mutual Insurance. We have licensed insurance agents who can help you find the best package for your employees or personal life by calling 888.732.5994 or email Sharon Ezra at [email protected]
