Traditionally, health insurance was a challenge for small businesses. In the changing market today, however, there are promising alternatives. An alternative industry buzz winner is the individual health insurance funded by the employer; where the company repays the premiums instead of paying them.
Now I know what you think - is to pay individual health insurance is still allowed? Yes, well, he is still allowed (see below in a bit). And more importantly, this approach is taking off because it solves the major challenges associated with traditional insurance coverage small business health.
In this article we'll take a look at how small businesses can use this approach to create benefits that work best for your business and employees
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Challenge 1 -.. Health insurance is dear
If you currently offer coverage or have sought quotes, this challenge is no surprise. health insurance coverage is expensive.
How much? for small and medium enterprises (three to 199 employees), the average annual premium in 2015 is $ 6,163 / year for individual coverage and $ 16,625 / year for family coverage (source).
the amounts of premiums, of course, are shared the employer and the employee. On average, small and medium enterprises pay $ 5,264 / year (85 percent) for individual coverage and $ 10,720 / year (65 percent) for family coverage.
Since 1999, premiums increased by 220 percent for single coverage and 203 percent for family coverage - making it difficult for many small businesses to continue to provide long-term benefits. The result? Today, only 56 percent of small businesses even offer traditional health insurance coverage to employees.
A better solution
With individual health insurance financed by the employer, the sets and employers control health benefit costs. If a company wants to contribute any amount to the health of employees, they can afford an individual health insurance program funded by the employer. No minimum contribution amounts. No annual renewal rate increases
Challenge 2 -. Health insurance costs are Unpredictable
Health insurance is not only expensive for small businesses and employees, but costs are also unpredictable year to year. unpredictable annual cost fluctuations result in a significant fiscal challenge for small businesses. And the reality is, premium costs increase annually for 0 per cent of employers.
A better solution
With individual health insurance financed by the employer, the amount of contributions not related to premium costs. The only time the maximum cost increase is if the company decides to increase the contribution amounts, or if the additional employees were added to the repayment plan
Related :. Switching to the individual health insurance financed by employer - 5 Ways This saves money
Challenge # 3 - Employees want more choices in health plans
for small businesses that provide health insurance coverage, it is common to simply offer the choice of a health plan. What is the challenge here? Employees often too much - or too little -. Cover
Increasingly, employees say they appreciate the choice and the ability to customize health benefits. In a MetLife survey, more than three quarters (78 percent) of employees want greater variety of benefits to choose from and 80 percent would value customized benefits to individual circumstances and age.
A better solution
instead of offering a one-size-fits health insurance plan offers employees a health care allowance to select and buy an individual health insurance plan that best suits their unique situation. Think of it as a personal expense account or a gift card for health insurance
Challenge # 4 -. Employees would pay less for coverage on trade
Many employees of small businesses would pay less out of pocket for coverage purchased on trade, compared to health insurance provided by the employer. As such, employees wonder how the management of their families can access premium tax credits on trade. The answer? Do not offer a traditional group health insurance coverage that disqualifies employees - and often their families - discounts
A better solution
To allow employees access to the premium tax. credit offer individual insurance instead of traditional health coverage funded by the employer. Employees buy their own plane can access premium tax credits if they qualify and are reimbursed for the unsubsidized portion of their bonus (up to the available balance)
Challenge # 5 -. Employers can pay the individual health insurance, right?
Wrong. This is a common question, and a common misconception. However, it is interesting to discuss because many small businesses are looking for ways to help employees with individual health insurance. (And there are consistent options!)
Some highlights:
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There are new rules for repayment of individual health insurance. Several notices were issued to strengthen the new rules.
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If a formal or informal arrangement is deemed unacceptable, significant charges may apply.
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To help with premiums of employees in a consistent manner, companies have two options: the first is a tax rebate plan consistent. The second subject is a health insurance allowance. Learn more about these options.
Conclusion
If you're like most small businesses want to offer health benefits to recruit and retain key employees, but traditional Insurance group health has its challenges. For small businesses face these five challenges, a better approach to health benefits individual health insurance is funded by the employer. Allow employees to take advantage of the modern individual health insurance and reimburse employees for their premium, or a portion of their premium.
In fact, many experts predict this type of individual health insurance financed by the employer is the future of the small health benefits of the company.
What do you think? What questions do you have? Leave a comment or question below.
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