Advice for small businesses navigating Obamacare
We maintained a commitment to providing health benefits to our team, but each year the cost would climb often by double digits, forcing tough decisions on whether to reduce benefits, increase employee shares or take a bite out of the bottom line.
As a business owner, the decision to offer health benefits is critically important particularly in light of the roll out of the Affordable Care Act.
Health benefits help companies recruit and retain talent in their workforce. A recent survey by Towers and Watson found that more than half of employees surveyed identified the health plan offered as a major reason to stay with their current employer.
Small business has traditionally been at a disadvantage providing these benefits facing higher premiums and administrative costs than large employers.
Much attention on the Affordable Care Act has been on the individual health care coverage options and the technical challenges with the exchange website. Depending on where you stand on the issue, the act has been a great success at enrolling millions of uninsured into coverage, or complete failure in both concept and implementation.
However, the act has altered the equation for small-business owners in deciding whether to offer coverage. In the past if you did not offer coverage, employees had a choice as to whether to purchase their own plans or to go uninsured, but with the individual mandate, everyone must purchase some form of health insurance.
For employers with fewer than 50 employees, there is a source of help to navigate the complicated new landscape. While the ACA does not require small businesses to provide coverage, the Small Business Health Options Marketplace (SHOP) offers an exchange-like model for businesses with fewer than 50 employees (expanded to 100 employees in 2016).
However, determining eligibility, enrollment times and participation rates can be a complex process.
As you undertake a review of your health benefits, here are a few suggestions to guide your decision making:
Gather employee feedback: Depending on the make-up of your workforce, the demand for health benefits may vary widely. Engaging your team helps employees feel part of the process and helps you decide how to best allocate resources to meet those needs.
Engage a navigator or broker: As much as the SHOP program tried to simplify the process, it can still be very complicated. Referrals to brokers and navigators are available on the Washington Healthfinder website. These experts can save you both time and money in your search for the right plan.
Investigate tax credits: Talk with your accountant about new tax credits available for small businesses providing health insurance. Determining eligibility and the best way to leverage these expenses at tax time can substantially lower the cost of coverage.
Look to the future: With the massive changes in the insurance marketplace, there exists little certainty on future rates for coverage. Cutting benefits or raising employee contributions is never a good move to make, so consider the long term sustainability of your health plan choices.
An enterprise is only as successful as its workforce. Conducting annual reviews of your benefits and creating long term strategies will pay dividends now and in the future.
Ryan Davis is the dean of the Business and Workforce Education department at Everett Community College.
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