The business is good, income is stable, and your company is willing to offer benefits for the health of employees . This is great. Health benefits are important to attract and retain a workforce of higher quality, but more importantly, you can now help your loyal employees with health care costs.
So how do you proceed? Probably employees have coverage they purchased themselves, and it is also likely employees receive discounts on their insurance premiums. Yes, purchasing a group health insurance policy is the traditional way to go about the health benefits of small businesses, but it can result in higher costs for business and employees.
There is a dilemma, but there is a simple win-win solution.
Note -. This is our free resource . "10 Budget Traps advantages of small healthcare companies" To download the full resource, click here
Tax premium credits Eligibility
Under Obamacare, significant federal cuts (called tax credits premium ) are available to employees - but only for individual health insurance, and only if your small business does not propose to traditional group health insurance coverage
in fact, just providing health insurance for employees and their families, you are disqualifying them from receiving $ 2,000 to $ 12,000 per year for their health insurance.
How to provide health benefits and do not disqualify employees
As your company considers the health benefits, ask around. Many employees may already have great coverage and be paying very little for a month because of the tax credits of the premium.
If this is the case, as with most small businesses, it may be wise to set up a formal program of health benefits to reimburse employees for their individual bonuses health insurance (a " premium repayment plan ").
with the premium reimbursement, small business help a formal repayment plan instead of contributing to a group health insurance policy.
employees to purchase individual health insurance, access to credits tax, and can be paid for the non-subsidized portion of their bonus on a tax-free basis
Related:.? can employees access a medical reimbursement plan and federal grants
Example
one of your employees ( "Joe") lives in Dallas, Texas, earns $ 60,000 / year and a family of five.
With an option of group health insurance plan, the company should pay $ 500 / month for full Joe. However, Joe would pay out of pocket to cover his four family members at a monthly cost of $ 10 / month. That is $ 14,400 / year Joe would pay for the entire family of five covered by the collective of the company plan.
Alternately, the Texas Health Insurance market (www.HealthCare.gov), Joe could buy individual coverage for the five family members for $ 899 / month -. before tax credits are applied
This is $ 10,788 / year ($ 899 × 12) for the same coverage and savings for Joe over $ 3.0 / year ($ 14,400 - $ 10,788).
But here's the kicker. With tax credits, Joe saves more . By not offering group health insurance, Joe and his family have access to the premium tax credits. Based on income and family size, Joe is eligible for a federal grant of $ 580 / month, which reduces the Joe monthly premium to $ 319 / month for all five family members.
With tax credits, Joe pays only $ 3,828 / year ($ 319 x 12) to cover his family of five.
By not offering group health insurance and allowing Joe to access tax credits, you save Joe $ 10,572 / year ($ 14,400 - $ 3,828).
Conclusion
offers health benefits is an exciting time for small businesses. This means revenue is stable and you are ready to contribute to the health of employees.
As business evaluates health benefit options , crunching the numbers. Most small businesses are finding that offering employees a premium payment plan saves money for the company and employees, and allows employees to keep their current coverage and discounts.
Do you have questions about the health benefits of small business and premium tax credit eligibility? Leave a comment below. We will help you to answer.
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