What You Need to Know About Group Health Insurance for Small Businesses (Part I)

Group Health Insurance

Group Health InsurancePurchasing group health insurance as a small business owner can be a rather intimidating task. This is especially true when you try to do it all on your own without any help. However, the process can be made a lot easier and less daunting if you let a professional agent assist you in choosing the right group health insurance plan for your small business.

In this two-part article, Bernardini & Donovan Insurance Services will break down what you need to know about group health insurance for small businesses. We’ll discuss what a small business is considered, why group health plans are important, some of the types of health insurance plans offered by small businesses, employer-sponsored health plans and things to consider, and finding an appropriate health insurance agent for you and your business.

There are a number of variables to consider when purchasing group health insurance. While there are many business insurance options available, your selection will be determined by your needs. That’s why we’re going to discuss important variables such as: determining whether your business is considered a small business or a large business; the health insurance plans available for small businesses; ideal plans based on your business; and more.

In this first part, we’ll be focusing on small businesses versus large businesses, why group health plans are important, and the types of health insurance plans offered to small businesses. In the next article, we’ll address employer-sponsored health plans (and things to consider) and how to find an appropriate health insurance agent for you and your small business.

Small-Group Employer vs. Large-Group Employer

As a small business owner, one of the most important considerations that you have to make will deal with the type of insurance that you offer to your employees. But, how do you know if your business is considered a small group employer or a large group employer?

The Affordable Care Act divided employers into two categories: small group and large group. There is a general dividing line at 50 full-time employees or equivalents, although there are some benefits specifically aimed at businesses with 25 or fewer full-time employees. A business that employs 50 or less full-time employees falls under the small group category. However, the full-time employee doesn’t necessarily have to be one individual.

A business can have as many part-time employees as it wants as long as the equivalent number does not exceed 50. In other words, an employer can have four part-time employees working ten hours a week for a total of 40 hours worked. These four people working a total of 40 hours collectively, is calculated as one employee. There can be any variation on this theme to qualify for the small group coverage as long as the sum total is no more than 50 full-time employees.

A full-time employee or equivalent is an employee who averages at least 30 hours per week or 130 hours in a calendar month. You must calculate your hourly worker’s service hours based on hours worked and hours of earned paid leave.

If you run a small business with two to 20 employees and are looking for guidance for your small business’ group health insurance, Bernardini & Donovan Insurance Services can offer the best and most cost-effective business insurance plans around. We’ll help cut through all of the confusion and unnecessary information so that you can have the peace of mind that comes with knowing that your employees are well protected in the event that something unfortunate should unexpectedly happen.

The Importance of Group Health Plans

In our healthcare perks article, the B&D team talked about how small businesses can attract talented employees through better healthcare perks. It’s no surprise that modern employees are extremely savvy about the bonuses that come with a job. Gone are the days when salary used to be the major competing factor in attracting new talent! Today, it’s as if everything is about healthcare, child care, continued education, retirement accounts, and other related perks.

This is great for both employees and employers. For employees, they can acquire more value than they could in a straight cash salary. For employers, companies can take advantage of a variety of tax incentives and breaks to provide these bonuses and remain competitive.

When it comes to establishing the ideal health insurance plan for your small business, consider how your plans benefit your employees.

  • Vision, Dental and Prescription Services. Though they may be optional, offering vision, dental and prescription services is not expensive and will go a long way towards showing employees that your business is concerned about their health. There’s also another benefit — providing vision, dental and prescription service makes it less likely that employees will go without care, damaging both their own health and their productivity. Mental health services and substance abuse services offer similar benefits.
  • Flexible Spending Accounts. Both health care flexible spending accounts and dependent care flexible spending accounts are extremely important perks for modern businesses. Employees will be able to set aside money in a tax-advantaged account, much like an IRA, to be used on both their own medical expenses and their child’s or other dependents. Many executive employees and other financially savvy employees specifically look for the flexible spending account option, as it makes more sense to them and will result in more money being acquired by them overall, as they can put tax-advantaged funds towards their medical costs.
  • Employee Health Programs. In addition to health insurance, employers can create health programs that promote good health to their employees. Many employees specifically look for these programs when they are learning about a job opportunity. Employee health programs can include everything from healthy provided snacks to an on-site gym, depending on your company’s budget.

Employers can look to their health insurance agency to find out more about what they can do to attract the best up-and-coming talent to their business.

Types of Health Insurance Plans for Small Businesses

  • Business Health Insurance Don’t: The “One Size Fits All” Plan. No two employees are the same, this has never been more true than when you begin to take their health into consideration.

Each employee (and their respective family members) will have their own unique considerations, which is why it is important to not opt for a “one size fits all” plan. Instead, engage your employees and take their feedback into consideration.

Try to find a plan that you can customize to fit the needs of the group instead of trying to force the needs of the group to work within the confines of the plan that you’ve selected after the fact.

  • Health Savings Accounts. One type of business insurance that has become increasingly popular over the last two decades is the health savings account (or HSA).

For individuals who are enrolled in an HDHP (or “high deductible health plan”) they can open a medical savings account with a number of tax advantages that they wouldn’t get from other types of plans.

Deposits into the account can be made by either the employee in question or by the employer and can be made on a pre-tax basis. The money in the account is then to be used to pay for things like medical bills and other unforeseen expenses related to their health.

One of the primary advantages is that the money continues to roll over each year and does not “expire” in the event that it goes unused for any specific period of time.

Finding Affordable Health Plans for Small Businesses: Bernardini & Donovan

When it comes to educating one’s self on group health insurance for small businesses, there’s a lot of information to consider. Remember that this is the first of a two-part article geared towards group health insurance plans. The goal is for small businesses to feel more confident when it comes to finding a service that suits them and their employees.

Just because you own a business doesn’t mean you should lose money trying to pay group health insurance for your employees. You can find the insurance coverage that works for your company’s budget while letting your employees have the health insurance program they need to stay healthy. If you want to jumpstart the process, feel free to browse the insurance products offered through Bernardini & Donovan Insurance Services.

The B&D team is here to help you find a suitable and affordable healthcare plan as a small business owner. We believe that you should find a healthcare plan that suits you and your budget, and we want to help.

Contact Bernardini & Donovan Insurance Services if you’d like guidance through the process of selecting the appropriate group health insurance for your business. We can help you make the right decision, and we have the right tools to help you find the perfect plan(s) for your employees as well as for your business.

We discussed the difference between a small-group and a large-group, the importance of group health plans, and some of the different types of health insurance plans that could be offered by small businesses. On the next blog, we’ll consider employer-sponsored health plans and how to find an appropriate health insurance agent.

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Tax Benefits You Can Get By Offering A Small Employer Sponsored Health Plan

Health insurance can be a very complicated part of being a small business owner. Many small business owners struggle with what they should do when it comes to health insurance for their employees. Many times they want to offer health insurance as an option but they find it difficult to fund that as a business owner. It can be very expensive and prices are only rising due to the healthcare mandate. However, there are options for you as a business owner so you can save money as well as provide a health insurance plan that they can choose.SONY DSCTax DeductionsAs a business owner, if you offer a qualifying group health insurance plan for your employees, you may be able to deduct 100% of the the premiums that the business pays for the employees. This is great news for all businesses but especially small business owners. While the cost may be high for insurance, if you can afford to pay it up front, you can deduct the amounts from your taxes at the end of the year. Another option is offering the plan as a total compensation package which would allow you to cut your payroll taxes.iStock_000083194887_MediumHealth Care Tax CreditAlong with the new healthcare mandate, there is also a new tax advantage for small businesses. This is designed to help you pay for health insurance for your employees, or at least contribute to the premiums. The tax credit can be up to 50% of the amount that you pay for the health insurance premiums as the business. It is also designed to help low or moderate income employees. To qualify for this tax credit, you must meet some basic qualifications. First, you must have less than 25 full time employees on staff. You must pay below the average of $50,000 annually per employee. Lastly, you must contribute at least 50% or more to the employee only portion of the health insurance premium. with this tax credit, the smaller the business, the bigger the credit can be. You are eligible to get this credit up to two consecutive years as well so it is great to take advantage of it.Contact us for more information about the tax benefits of offering health insurance. We can also help you find the perfect plan for your business and your employees.

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Why To Consider Offering An Employer Sponsored Health Plan Instead of Reimbursing Employees

In recent years, there have been small business employers who have opted to reimburse their employees for the cost of health insurance instead of offering health insurance. While you are not required to offer health insurance to employees if you have less than 50 full time employees, you may want to consider doing so. Reimbursement for Individual Health PlansIf you reimburse your employees currently, there is a huge reason to stop doing that immediately. With the Obamacare mandate, you may be fined up to $100 per day, up to $36,500 per year, if you reimburse employees for medical care and have more than 50 full time employees. As a small time business owner, this is not a fine you have to worry about with 2-50 full time employees but if your company is growing, you may want to stop offering this before you do run the risk of paying a yearly fine. However, it is a viable option for a small business employer, which is called a Healthcare Reimbursement Plan (HRP), but not in the long run.iStock_000063700051_MediumOffering A Sponsored Health PlanAnother option is offering an employer sponsored health plan to your employees. Not only will they have an option for health insurance that is often better than the general marketplace, but as a small business employer, you are also eligible for a tax credit by offering a plan instead of reimbursing. There are specific requirements for this tax credit, though, so not every small employer is eligible for the tax credit. The requirements are as follows:

 

  • You must have less than 25 full time employees
  • On average, you must pay less than $50,000 per year in wages per employee
  • You must pay at least half of the employee health insurance premiums of the plan you are offering

 

Tablet on a desk - Health and Medical
Tablet on a desk – Health and Medical

Tax Credit Benefits to Expect

The tax credit you will get back is 50% of the premium you paid for as the employer portion. If you are a small tax-exempt employer, then the credit is only for 35% of the amount you paid. The tax credit is also only available for two consecutive tax years.

If you would like to learn more about the tax credit and how it can benefit you as a small business employer, please contact us for more information.

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A Buyer’s Guide: What to Look For in a Small Employer Sponsored Health Plan

As part of the Affordable Care Act, employers with 50 employees or more must provide or help subsidize health insurance for their employees. Rather than looking at this policy change as a potential cost, small and medium business owners should focus on the competitive advantage – and tax benefits – offering health coverage can provide. As the cost of healthcare continues to rise, good health insurance coverage is becoming more and more of a differentiator when top talent is choosing between companies. Especially as younger generations enter the workforce, they expect to receive coverage and may use these types of benefits to help decide what companies they want to apply and work for. To ensure your business stays competitive within the job market, here are three top considerations to guide your decision when choosing employer sponsored healthcare:Insurance coverage

  1. Know What Coverage Matters: the top coverages employees look for are preventative care, hospitalization, and co pays. Understanding these coverages is your first step to choosing policies that keep your workforce healthy and happy. Talk to our team of specialists to help you balance cost against these critical needs.
  2. Choose Who Gets Covered: next, you need to decide if everyone will qualify for the same policy. Will part-time employees be offered different package options than full-time employees? How will you treat their dependents? The amazing thing is that you don’t need to choose a “one size fits all” policy. Your insurance agent will help you understand your workforce and choose policies that comply with the Affordable Care Act while meeting your needs and those of your employees.
  3. Decide How Much You Will Contribute: lastly, you’ll decide how much of these policies you choose to subsidize. Some employers opt to pay for the entire policy, others offer a sliding cost scale based on coverage, and some only cover a flat percentage of the employee’s’ total health care costs. It’s important that you offer “affordable” coverage to avoid any fines associated with the ACA, so work with your provider to understand median policy costs in your region and how these costs stack up against your employees’ wages and cost of living.

You’re well on your way to choosing a great policy and we are here to help every step of the way!

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Things to Consider When Choosing A Health Plan Offering For Your Small Business

When you own a small business, with 2-50 employees, even if you are not required by law to offer a health plan for your employees, you may still want to. If you want to choose a health plan for your employees, there are a few things to consider before making your decision. You need to keep both your business goals as well as the benefit of your employees in mind. This is a careful balance but it can be done with the right considerations along the way. Use this list as your guide through the process.Hand writing Employee Benefits with blue marker on transparent wipe board isolated on white.

  • How much can your business pay and how much can your employees pay? In general terms, plans come in terms of premiums. The higher the premium, the lower the costs out of pocket and vice-versa. Something to consider is how much both your business and your employees can afford in terms of premiums and out of pocket costs when they use the insurance. You will want to find a happy medium that makes both you and your employees happy.
  • Will you offer one plan or a choice of plans? There are many plans for you to choose from and your biggest decision will be whether you want to offer one or a choice of a few for your employees. You will want to explore all of the options available for your area. One main reason employers offer more than one plan is because some employees want a better plan than the most basic plan and others just want something to meet legal requirements.
  • Will you offer other plans, like dental and vision? You are not just limited to medical plan offerings. If you want, you can offer your employees vision and dental offering as well.
  • How much will you pay for? As a business, you can offer to pay a portion of the premiums on behalf of your employees. Most employers offer to pay a specific portion of these benefits, like half of the employee only plan cost. You will want to determine what you will pay for before as a company.

Be sure to contact us at Bernardini & Donovan Insurance Services to help guide you through the process and help you make the right decision. We have the right tools to help you find the perfect insurance plan(s) for your employees as well as for your business.

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Adding a Spouse to Your Health Insurance Plan: Important Considerations

Whether you’re getting married in the near future or are already married, there’s a good chance that you’ll need to add a spouse to your existing health insurance plan at some point. If this applies to you, then there are some important considerations you’ll want to keep in mind as you go through the process.

Annual Enrollment Periods

First of all, understand that all insurance companies have what’s known as an “open enrollment period,” which usually occurs once each year. This is a pre-determined window of time when new members can sign up for a health insurance plan and spouses/dependents can be added to existing plans. Make sure you know when your company’s annual enrollment period is and make sure you get all necessary paperwork submitted during this time to ensure coverage for your spouse.

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Qualifying Life Events

Keep in mind that there are certain situations where you may be able to get your spouse enrolled outside of the annual enrollment period. For example, marriage is generally considered to be a qualifying life event, as is a situation where your spouse unexpectedly loses his or her job and is therefore left without an insurance plan. Check with your insurance carrier for a list of qualifying life events and find out how long you have after a qualifying event to enroll. In many cases, you have around 30 days.

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Necessary Documentation

Last but not least, make sure you have all the necessary documentation to add your spouse to your existing plan. For instance, if you’re newlywed, then you’ll need to provide a copy of your marriage certificate. If your current spouse has lost coverage through his or her own job, then a letter explaining this (or a termination letter, in the event of a job loss) may also need to be provided.

Now that you have a better idea of what to expect when adding your spouse to your health insurance, you can be better prepared to go through the process. For further assistance, contact the experts at Bernardini & Donovan Insurance Services today.

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Affordable Care Act Filing Deadline Extended for Employers

If you run a business that has 50 or more full-time employees (or the equivalent of full-time employees), then there’s a good chance you need to fill out and submit both 1094-C and 1095-C forms as you prepare for the coming tax season. Specifically, a 1095-C is a form that you must send out to each individual employee; this form contains information on the health care coverage that was offered to the worker, the lowest premium cost that was available, and the number of months the coverage was available. You are required to submit this form to all employees, regardless of whether they accepted their coverage options or not.36858559_lOn the other hand, a 1094-C is a form that’s submitted to the IRS as a means of reporting the number of employees you have, the number of 1095-Cs you sent out to your workers, and some other basic information about your company.Deadline ExtensionsOriginally, the deadline to send all 1095-C forms to employees was February 1, 2016. However, the IRS has extended the deadline to no later than March 31, 2016. As for the 1094-Cs, the original deadline was February 19 for those filing on paper with less than 250 1095-Cs, and March 31 for those filing electronically with more 250 or more 1095-Cs to prepare. The new deadlines are May 31 and June 30, respectively.24544749_lFailure to meet the IRS’s new deadlines could subject your business to hefty fines and penalties (up to $250 for each violation), so it’s important that you take the steps necessary to prepare these documents and have them postmarked no later than the new deadlines. For many employers, preparing these documents and ensuring their accuracy can be an overwhelming task. If you’re looking for additional resources to assist you or would like to provide your employees with better health benefits in the coming year, Bernardini & Donovan Insurance Services is here to help.

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The Different Types of Business Insurance That Are Available

 

If you’re a small business owner, one of the most important considerations that you have to make will deal with the type of insurance that you offer to your employees. Not only will there be situations where you cannot or should not offer coverage, but it’s also important to keep in mind that you cannot reimburse for individual health plans. There are a number of different types of business insurance that are available for you to choose from depending on your needs.

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Business Health Insurance Don’t: The “One Size Fits All” Plan

 

No two employees are created equally – this is never more true than it is when you begin to take their health into consideration. Each employee (and their respective family members) will have their own unique considerations, which is why it is important to NOT opt for a “one size fits all” plan from your provider. Instead, engage your employees and take their feedback into consideration. Try to find a plan that you can custom design to fit the needs of the group, instead of trying to force the needs of the group to work within the confines of the plan that you’ve selected after the fact.

 

Health Savings Accounts

 

One type of business insurance that has become increasingly popular over the last two decades is the health savings account, or HSA. For individuals who are enrolled in an HDHP, or “high deductible health plan,” they can open a medical savings account with a number of tax advantages that they wouldn’t get from other types of plans. Deposits into the account can be made by either the employee in question or by the employer and can be made on a pre-tax basis. The money in the account is then to be used to pay for things like medical bills and other unforeseen expenses related to their health. One of the primary advantages is that the money continues to roll over each year and does not “expire” in the event that it goes unused for any specific period of time.

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If you run a small business with two to 20 employees and are looking for the best and most cost effective business insurance plans around, please call Bernardini & Donovan Insurance Services today for more information. We’ll help cut through all of the confusion and unnecessary information so that you can have the peace of mind that comes with knowing that your employees are well protected in the event that something unfortunate should unexpectedly happen.

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Business Health, Employee Health — Putting the Two Together

When the first of next year (2016) rolls around, your business could be in hot water if you don’t offer health coverage to your employees. If you have 49 or fewer workers, you’re in the clear, but for all of you with 50 or more workers, health coverage will be mandated, and if you fail to provide it, you’ll have to pay a penalty. As expected, the growing demand for specialty drugs and specialty pharmacies are making health care rates rise on a yearly basis, and in 2016, there could be double digit increases in premiums. Still yet, though, with 50 or more employees, you must offer them coverage.  Here’s a close look at the top reasons you need to provide your workers with health insurance.

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It’s the Law

As stated above, in 2016, it will be required by law that you offer health coverage to all full-time employees. For each worker that you don’t provide coverage for, you’ll pay an individual penalty, which quickly adds up the more employees that you have. However, for employers with 50 or more employees the first 30 are exempted from the penalty.

You can Attract Top Talent

By offering your workers health coverage, you’re more likely to recruit some of today’s best employees. They can boost your company’s success, and because you offer insurance, they are more likely to stay with your company for many years.

Major Tax Advantages

All premiums that you pay for workers are completely tax deductible; this allows you to provide your workers with a great benefits package that costs less money out of your pocket than what the package is valued at. With an incorporated business, your employee’s insurance premiums can be deducted pre-tax, as well.

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Enhances Productivity

When your employees don’t receive the proper healthcare that they need, you’ll notice an increase in absenteeism and lower levels of productivity. With health insurance, however, the well being of your employees will be enhanced as well as their productivity levels.

 

Are You Providing Coverage to Your Workers?

Whether you employ two workers or 2,000, there are many benefits to be gained from providing them health coverage. And while you’ve probably been scrambling around this past year to get coverage set up, you may be behind on deploying the new insurance offerings. Fortunately, though, here at Bernardini & Donovan, we specialize in employer-provided health insurance plans. We can answer any questions you may have about various coverage plans, and more importantly, we can make sure that your company is in full compliance with the law come January 1, 2016.

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Attracting Talented Employees through Better Healthcare Perks

Modern employees are extremely savvy about the bonuses that come with a job. Gone are the days when salary used to be the major competing factor in attracting new talent —  now everything is about healthcare, child care, continued education, retirement accounts and other related perks. This is a great thing for both employees and employers. For employees, they can acquire more value than they could in a straight cash salary. For employers, companies can take advantage of a variety of tax incentives and breaks to provide these bonuses and to remain competitive.

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Vision, Dental and Prescription Services

Though they may be optional, offering vision, dental and prescription services isn’t expensive and will go a long way towards showing employees that your business is concerned with their health. There’s also another benefit — providing vision, dental and prescription service makes it less likely that employees will go without care, damaging both their own health and their productivity. Mental health services and substance abuse services offer similar benefits.

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Flexible Spending Accounts

Both health care flexible spending accounts and dependent care flexible spending accounts are extremely important perks for modern businesses. Employees will be able to set aside money in a tax-advantaged account, much like an IRA, to be used on both their own medical expenses and their child’s or other dependents. Many executive employees and other financially savvy employees specifically look for the flexible spending account option, as it makes more sense to them and will result in more money being acquired by them overall, as they can save tax-advantaged funds towards their medical costs.

Employee Health Programs

In addition to health insurance, employers can create health programs that promote health to their employees. Many employees specifically look for these programs when they are learning about a job opportunity. Employee health programs can include everything from healthy provided snacks to an on-site gym, depending on your company’s budget.

Employers can look to their health insurance agency to find out more about what they can do to attract the best up-and-coming talent to their business. Having solid, comprehensive health care options are not.

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