What are the best practices for small employers to follow with the Affordable Care Act?
1. Make certain everyone knows the real cost of premiums, both monthly and annual.
2. Offer at least two plan options so employees decide whether to spend more on premium or take more risk and spend less out of their pay for insurance.
3. Only allow spouses to be enrolled if they do not have access to insurance where they work. The days of supplementing spousal coverage are over.
4. Allow employees to cover their children without question and consider how much of a subsidy is merited based upon your culture
5. Investigate SHOP (Small Business Health Options Program) as it can allow up to a 50% tax credit on the premiums an employer pays. Warning, though: the credits drop if you employ more than 10 employees and pay them on average more than $25,000 in wages.
6. Remember when considering dropping health insurance that employer paid premiums are tax deductible and employee payroll contributions are paid pre-tax. This is worth a 30% cost reduction on average. If employee compensation is less than $30,000 on average, then government subsidies are as efficient financially as tax deductibility.
Offering health insurance is important to employers who embrace the value of benefits beyond cash compensation. This value varies from business to business.