Since small companies evaluate how to provide benefits to affordable health that also meet the expectations of employee benefits, there are three key opportunities to understand and leverage :. 1) the affordability of individual products, 2) government subsidies, and 3) the ability to pay the insurance premiums
This article provides an executive level summary of these three themes . you to dive.
1. Better individual products, with reduced costs
Since small companies assess how to contribute to the health of employees, employers take a second look at the individual insurance policies disease. Since 2014, individual products have improved and generally have lower costs than group policies.
Here are some statistics:
- The average group health insurance policy in the United States costs $ 6,251 per year for individual coverage
- The individual policy average Medicare. the United States costs $ 3,587 per year (43 percent less) for individual coverage or $ 2.497 per year (60 percent less) for those who are eligible for grants.
- With the group health insurance, the average employer contributes $ 5,180 per year for single coverage and $ 12.50 per year for family coverage.
- Given the cost of the various policies, the average employer could fully fund an individual or a family policy for less than they could finance part of the coverage of the employed under a group policy.
In addition to reducing costs, individual policies are now more similar to group policies. For example, individual policies should cover all applicants regardless of health conditions and cover essential health benefits.
2. Government Grants
Adding to the affordability of individual policies are government grants available with individual health insurance
Here are some statistics :.
- In 2015, 85 percent of people with coverage of active market received a grant.
- The average subsidy of health insurance was $ 272 per month, or $ 3,264 per year.
- 80 percent of the market buyers purchased coverage for less than $ 100 month, after their grant.
3. Paying Premiums, instead of paying
As described in this article, the cost of individual health insurance and subsidies for insurance disease are two factors that make them more affordable health benefits for small businesses.
But you may think - where does the employer contribution go? The answer is by paying premiums instead of paying them.
Rather than buying a small health insurance policy group to cover employees and eligible dependents, a more cost effective approach is to implement a formal health care plan to reimburse employees for health insurance premiums
Here are some facts :.
- employers can use a formal repayment plan tax benefits (such as HRP) to reimburse individual health insurance premiums. This type of plan is consistent with existing federal rules and reforms.
- Employers can also help employees with taxable bonus or raise.
- Employers should avoid paying for insurance premiums disease directly, or reimburse employees outside of a formal repayment plan consistent. These practices are considered non-compliant employers payment plans and employers could face steep costs.
- In May 2014, by analyzing S & P Capital IQ, a division of McGraw Hill Financial, projected at 0 percent of employees who currently receive health insurance through their employers could be transferred to individual health insurance and public exchanges in 2020, now only four years away.
- This approach seems to take first among small businesses. After all, small employers with less than 50 FTE employees are not required to offer health insurance under the Affordable Care Act and are statistically less likely to offer traditional insurance because of cost barriers .
Conclusion
As small businesses are looking for ways to provide affordable health benefits and quality, there are three key ways: the affordability of individual products, government subsidies, and the ability to offer a formal, tax benefits benefit program through a medical reimbursement plan.
What questions do you have? Leave a comment below.
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