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Most business leaders agree health benefits offer employees peace of mind andprotection.
Businesses large and small rely on health benefits toprovide a unique competitive-edge in the
battle to attract and retain talentedworkers.
Whether your business is a long-time employee benefits provider, or you are considering
employer-sponsoredbenefits for the first 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 anddisadvantages of providing health coverage.
Tip for small businesses:
Employer-sponsoredbenefitsmay offer you a cost-effectiveway toboost employee
compensation. Although employerswith less than 50 full-time equivalents (FTEs) will not be
penalized for not providing a health plan, still many small businesses realize health benefits are
an important part of an employee’s total compensation package.
If you currently offer health insurance to employees, some individualsmay be eligible for a
tax-subsidy topurchase individual coverage through the federal and stateHealth Insurance
Marketplace (employeeswith a household incomebetween100 and400percent of the
federal poverty level [FPL]). Inwhich case, itmay be
cheaper for them topurchase coverage through the
Health InsuranceMarketplace. On theother hand,
employees not eligible for a tax-subsidy couldbenefit
from employer-provided coverage as opposed to
purchasing individual coverage through theHealth
InsuranceMarketplace. The2013AflacWorkForces
Report revealed78percent of employees say their
benefits package is important to their job satisfaction,
and65percent say it is important to their loyalty to their
employer.
Tip formid-to-large sizedbusinesses:
Employerswith at least 50 FTEsmay be subject topenalties if they do not provide affordable
andminimum value employer-sponsored health insurance.
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Employeeswith household
incomes between 100 and 400percent of the FPL couldbenefit frombuying health insurance
from theHealth InsuranceMarketplace, because theymay receive a premium tax credit to
helpoffset the cost of coverage. On the other hand, employeeswhodo not qualify for these
subsidieswill not receive a tax credit. Themajority of employers
(88percent) say theywill continue to offer health benefits to active employees in 2014.
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As
you consider whether toprovide coverage, keep inmind that an employer’s contribution to a
health benefits plan is tax-deductible, whereas the potential $2,000 - $3,000per employee
penalty for not providing affordable, minimum value coverage is not. Formore information
about penalties, see
As you consider offering employer-sponsored health insurance, it is important to assess the
amount your business can invest inworkforce benefits.
Essential Question 1:
Should I
offer employer
provided
coverage
or not?
78
%
of employees say
their benefitspackage
isextremelyor very
important to their job
satisfaction, and65% say
it is important to their
loyalty to their employer.
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