With the Affordable Care Act on its way to full implementation, many entrepreneurs are struggling to face one of their most pressing challenges: devising a reliable and strong small-business health-care plan for employees.
This can be a challenge not only financially, but also logistically, as busy small-business owners are often preoccupied with devising new ways to drive in profits while staying on top of small-business trends to keep ahead of the competition. While crucial provisions may be years away, small-business owners can’t afford to continue to push off planning for health-care reform. Rather than stress out about not knowing how to proceed, check out these tips on best practices for implementing a compliant health-care plan for your small business.
1. Understand Obligations. While the Affordable Care Act will bring sweeping changes to the current state of the American health-care system, the changes are hardly one-size-fits-all. Businesses were originally required to provide health-care coverage for employees by Jan. 1, 2014, but in recent months, the Obama administration has postponed these initiatives until 2015.
Small businesses with fewer than 50 employees are exempt from having to provide health insurance for their workers, which has come as a relief to many entrepreneurs. However, refraining from providing health coverage can be damaging to a business, as virtually all Americans will be required to purchase their own insurance, whether through private providers or through state-run exchanges. Because these options can still be quite expensive depending on how much coverage an individual needs, offering a competitive benefits package can help draw in top candidates for hiring and retain important staff members.
2. Get to Know the Benefits of Providing Health Care. The federal government is making a concerted push to encourage small-business owners—even those with fewer than 50 employees on their payroll—to offer some form of health insurance. The U.S. Small Business Administration has provided online tools to help entrepreneurs find health-care insurance options for their staff. Check it out to stay compliant and help keep top performers around.
One of the major ways the federal government is promoting small-business health-insurance options is through the Small Business Health Options Program, which will allow small businesses to provide health insurance by pooling resources in the same competitive realm as large corporations. Beginning in 2014, small businesses that use the SHOP exchange to purchase insurance for workers will be eligible to receive a two-year tax credit covering up to 50 percent of premium costs, reducing business costs for many small-business owners who currently offer insurance to employees.
3. Consult with Experts. Most entrepreneurs don’t get into business with a full legal background in health-care laws, so if you’re struggling to navigate the increasingly complicated legal status of health care in the U.S., don’t be afraid to ask for help. After all, the ACA and resulting regulations and addendums span literally thousands of pages, and as a busy small-business owner, this may hardly seem like light reading after a long day at the office.
When it comes down to making decisions that can affect the financial future of a company, it’s a smart idea for businesses to consult with experts. Nancy Thompson, a vice president at CBIZ Benefits & Insurance Services, told the Boston Herald it’s smart for business owners to consult with someone before committing to a health-care plan.
“There’s absolutely no way that an employer of any size, with the continuing moving parts, can know all of it,” Thompson says. “Employers need to be with someone that is strategically working with clients to help them navigate it.”
4. Communicate with Employees. The ACA requires employers to inform their staff about their health-insurance options, whether letting employees know they will soon have health-insurance options available through employment or by informing them they should look into state health-insurance exchanges through a Notice to Employees of Coverage Options.
Owners who decide to offer coverage must provide employees with a Summary of Benefits Coverage, laying out the details of the plan. Entrepreneurs should be prepared to answer any and all questions from employees, focusing on dates of implementation and what kinds of services will be covered under the new program.
It’s important to maintain open dialogue with employees. Alternatively, if an entrepreneur is running a small company with just a few workers, it may be a good idea to hold a staff discussion on possible health-care options before deciding on a plan. If a business owner has a staff of four people, all of whom play vital roles in the company, an entrepreneur can hold an open and honest discussion with employees about the costs and benefits of health-insurance options, in order to gauge their opinions on this important matter.