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Most business leaders agree health benefts offer employees peace of mind and protection.
Businesses large and small rely on health benefts to provide a unique competitive-edge in the
battle to attract and retain talented workers.
Whether your business is a long-time employee benefts provider, or you are considering
employer-sponsored benefts for the frst time, with deadlines looming for health care reform
now is the time to look at the size of your business, employee demographics, and the cost
advantages and disadvantages of providing health coverage.
Tip for small businesses:
Employer-sponsored benefts may offer you a cost-effective way to boost employee
compensation. Although employers with less than 50 full-time equivalents (FTEs) will not be
penalized for not providing a health plan, still many small businesses realize health benefts are
an important part of an employee’s total compensation package.
If you currently offer health insurance to employees, some individuals may be eligible for a
tax-subsidy to purchase individual coverage through a health care exchange (employees
with a household income between 100%-400% of the federal poverty level [FPL]). In which
case, it may be cheaper for them to purchase
coverage through the exchange. On the other hand,
employees not eligible for a tax-subsidy could beneft
from employer-provided coverage as opposed to
purchasing individual coverage through the health
care exchange. The 2012 Afac WorkForces Report
revealed 73% of employees say their benefts package
affects their job satisfaction, and 68% say it affects
their loyalty to their employer.
Tip for mid-to-large sized businesses:
Employers with more than 50 FTEs may be subject to penalties if they do not provide
affordable and minimum value employer-sponsored health insurance. Employees with
household incomes between 100% and 400% of the FPL could beneft from buying health
insurance from the exchange, because they will receive a premium tax credit to help offset
the cost of coverage. On the other hand, employees who do not qualify for these subsidies
will not receive a tax credit. The majority of employers (88 percent) say they will continue to
offer health benefts to active employees in 2014.
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As
you consider whether to provide coverage, keep in mind
that an employer’s contribution to a health benefts plan
is tax-deductible, whereas the $2,000 - $3,000 penalty
for not providing affordable coverage is not. For more
information about penalties, see Appendix Chart 1.
Essential Question 1:
Should I
ofer employer
provided
coverage
or not?
73
%
of employees say their
benefts package afects
their job satisfaction,
and 68% say it afects
their loyalty to their
employer.
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88
%
of employers say they
will continue to ofer
health benefts to active
employees in 2014.
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