5 things to consider about health insurance for a small business
Small businesses want what’s best for their employees. This includes providing health coverage for all workers.
But, where to start?
Costs, plans and the complexities of health coverage administration can overwhelm business owners. As you decide to move forward with plans of providing your employees with health benefits, keep these five considerations in mind.
Must small businesses provide coverage to employees?
Companies with 50 or more full-time equivalent employees are required to do so, per the Affordable Care Act.
If you run a smaller operation, providing health care isn’t required, but doing so can help you attract and keep high-level talent.
What are the costs?
By some estimates, an employer will spend about $6,000 annually on average per enrolled employee. The employee will pay less in the shared cost of getting health insurance.
Businesses can learn more about the financial details through the Affordable Care Act’s Small Business Health Options program.
What’s more important: low deductibles or low premiums?
You want the best for your employees, so figuring this out is a high priority once the decision is made to provide health coverage.
The bottom line is that both offer tradeoffs.
One method to bring down the costs is achieved by offering a High Deductible Health Plan. Under this, employees pay the initial amount for coverage directly. In addition, costs for this popular option among small businesses can be offset by a health savings account.
Who manages the administration and paperwork?
A professional employment organization offers services as a co-employer to help small businesses manage the administration of providing health care.
Using this option, employers can often save their employees money since services are shared. This pool places employees with others in different companies, cutting down the costs of health care administration.
Am I eligible for a tax credit?
Visit healthcare.gov to find out if your business is eligible for a tax credit for providing health coverage.
If your business employs fewer than 25 people, you may be able to receive this tax break. The amount you pay toward health coverage, and employee salaries, are factors in this determination.
Keep in mind that tax credits expire within two years.
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