It's that time of year again. Open Enrollment for healthcare coverage through the Affordable Care Act runs from Nov. 1 through Dec. 5, 2018 -- meaning health insurance is likely on your mind. To avoid missing out on coverage, it's essential for entrepreneurs to start plotting their healthcare strategy.
While it's important to make sure that you and your employees have healthcare coverage, your responsibilities don't stop there. Depending on the size of your business, there are a number of compliance rules (e.g., providing minimum essential coverage) that you must follow to avoid penalties. Furthermore, covering all or part of employee premiums and offering quality health insurance plans can help you attract top talent and reduce turnover in your organization.
After all, a Harris Poll found that 86 percent of Americans see health benefits as a key driver when it comes to making career decisions. In addition, an Employee Benefit Research Institute survey found that respondents who indicated they were satisfied with their benefits were more likely to be satisfied with their jobs overall.
You can also hurt your bottom line by not providing employees with high-quality health insurance. According to a study from Experian Health, 98 percent of respondents say that being able to pay their medical bills is "very" to "extremely" important. Employees with high-deductible plans may put off seeking medical treatment, which only exacerbates health issues and leads to more time spent away from the office. You can lessen the likelihood of this by offering low-deductible plans or by offsetting the out-of-pocket burden to your employees. Covering a significant portion of your staff's monthly premiums or funding a health savings account or health reimbursement account for your team are among the ways you can accomplish this.
With all of the possible benefits in mind, it's important to know what your goals are when it comes to offering healthcare coverage. Do you want to increase employee retention, encourage individuals to get the help they need, increase productivity, comply with the law, or a combination of these things? If you know your goal, then you'll be better able to decide which option is the best fit. To ensure that you're ready to tackle healthcare coverage in preparation for 2019, make sure you can check these four boxes.
1. Make sure you're following the law.
Comb through the benefits package you offer employees and ask questions. If you have more than 50 full-time employees, the burden of providing affordable healthcare falls on your business, per the Affordable Care Act. (Here "affordable" means that an employee's contribution or premium cannot exceed 9.86 percent of the employee's household income in 2019.) Should you fail to offer this, you can incur a penalty of $2,320 for each full-time employee after the first 30, so it's best to do everything necessary to meet compliance. The IRS offers online resources to assist you, or you can seek out consulting companies, insurance brokers, or compliance apps that can help you ensure you're meeting compliance standards.
2. Know how to shop for health coverage.
It's important to educate yourself on health benefits options and trends in your industry regarding those benefits; having that context will help when you shop around. If you have a few employees, shopping for group coverage can prove to be a more affordable option, and in some states, you can apply as a "group of one." Your healthcare prices will vary depending on your area of operation, the age of group members, and other factors, but in general, a group plan will provide more thorough coverage than individual health insurance. You can also benefit from having an insurance broker who can advocate with providers on your behalf. When choosing this person, ask co-workers, friends, and former colleagues for recommendations and read through LinkedIn testimonials to find the best fit.
3. Remember tax credits and deductions.
Consider what tax credits and deductions exist based on your business's profile. For instance, if you have fewer than 25 employees working for you full-time, you can shop for health plans through the Small Business Health Options Program (SHOP) exchange, which is a subset of the Affordable Care Act. Tax credits are granted based on a number of criteria, but if your business doesn't qualify, you can still deduct the health insurance premiums you pay from the taxable income of your business. Of the many tax deductions available to small businesses, health insurance costs are one of the most common.
4. Sole proprietors need insurance, too.
Self-employed? You still need coverage. Health insurance will protect you and your family in case of accidents or illnesses, and it can also help you keep your doors open when urgent medical costs might otherwise put you out of business. Look for insurance options on the individual Health Insurance Marketplace if you're an independent contractor, freelancer, or self-employed. Depending on your income level and marital status, you may qualify for tax credits or other savings. If you have questions about your options or enrolling, you can try one of the many resources available: call the Marketplace Call Center, find a local organization that is helping people navigate health insurance, or work with an agent or broker to choose a plan.
Being an entrepreneur can provide you with an unparalleled level of freedom, but it also means you have to serve in administrative roles and find healthcare coverage for yourself and your employees. When selecting coverage, make sure you research all of the deductions and tax credits available for your particular situation. Whether you have one employee or 100, you can end up saving a substantial sum by researching before you buy.