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standards, and can actually capitalize on going above andbeyond to helpprotect workforce
health andwellbeing. As you assess your current plan, keep inmind that employeesmay be
eligible for tax subsidies through theHealth InsuranceMarketplace if their required contribution
to employer-sponsored health insurance exceeds 9.5percent of the employee’s household
income or the plan pays less than 60percent of covered health expenses.
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Health InsuranceMarketplace:
TheHealth InsuranceMarketplace (also called an exchange) is expected tooffer competitive
benefits options to small businesses and individuals. Additionally, small businesses
participating in theHealth InsuranceMarketplacemay be eligible for a tax credit of up to 50
percent of their premiumpayments if they have 25 or fewer* full-time equivalent employees
whose average annual wages are less than $50,000.
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While it is still too early to tell exactly how competitive theHealth InsuranceMarketplace
will be, tax credits coupledwith options in theHealth InsuranceMarketplacemay help
your business toprovide cost-effectiveworkplace benefits. If you are considering shifting
employees to theHealth InsuranceMarketplace, youmay save on health care costs that could
be allocated to supplemental benefits or employee salaries toprovide increased value to your
employees.
* Firm size: Aqualifyingemployermust have25or fewer full-timeequivalent (FTE) workers. Employerswithmore than
24workersmaybeeligible if they still have fewer than24FTEs. For example, if a firmhas40employeeswhowork
part-time, the firmmay count 20as FTEs and, therefore, the firmwouldqualify in thisgroup. Note: ThePPACA says that
employerswith25or fewer FTEsmayqualify for thecredit; thecredit amount isphaseddown to zero for anemployer
with25FTEs. The IRSwebsite, asof Sept. 20, 2013, says that employerswith fewer than25FTEs areeligible for the
credit. Formore information, see
.
Self-fundedmodel:
Self-funded health care insurance plans offer an alternative to traditional health caremodels.
In a self-fundingmodel, the company is responsible for covering all claims in the health care
plan, but because these plans are excluded from some requirements of theACA, employers
can save costs related topremium taxes and state insurance regulations.
Self-fundedplans tend to shift additional costs to employees, especiallywhen an employer
has aworkforcewith significant health care needs. Companiesmay also need to consider
adding adequate stop-loss coverage to accommodate for annual and lifetime dollar limit
restrictions. Still, these plans are becoming increasingly popular with small businesses and
can help to reduce andmanage employee health care costs, while still delivering the health
coverage that their workforce demands.
Definedcontributionmodel:
In adefined contributionmodel, employers give their employees a fixed amount ofmoney
and a list of health insuranceoptions for employees topick and choose. This helps employers
to keep costs predictable, while alsooffering employees theoption to “buy-up” tomore
robust insurance coverage. Since theseprograms require employees tomakemore informed
decisions about health care, it will be increasingly important that they understandhow an
employer contributionworks, andhow to choose supplemental options to augment out-of-
pocket costs.
