With the implementation of the ACA, SMALL GROUP plans, products and rules have changed dramatically. A “small group” is defined as a business with 1-50 employees. If you have more than 50 employees based on a calculation of “full time equivalent” (FTE) employees, you must offer health insurance to your employees. If your FTE count is less than 50, you are not required to offer health insurance to your employees. Given the tax and legal implications of the ACA, the decisions regarding small group health insurance plans, as well as large group plans, are much more complex. The consequences of making an uninformed decision can be severe and expensive.
Some key questions that demand your attention include:
- How do you accurately calculate the full time equivalent (FTE) employee population of your firm to determine whether you have a large or small group under the rules of the ACA?
- As a small business owner, what are the pros and cons of having a small business health insurance plan?
- What are the requirements for all small business owners, regardless of whether they have a small group health insurance plan, to notify their employees, in writing, about the ACA provisions?
- Should you offer benefits to all employees and their dependents or only employees?
- Should you purchase a plan through the SHOP (State/Federal Exchange) or outside the exchange?
- What are the penalties for employers as well as employees choosing not to enroll, but rather waive, their coverage?
- Are your/your employees’ preferred doctors part of the network the carrier utilizes? Many carriers now have multiple provider networks. What are the advantages and disadvantages of choosing one over the other?
- Can you offer more than one plan option so employees have a choice?
- What drugs are included on the various carriers’ prescription formularies and how does that impact costs as both an owner and user of the small group health insurance plan? Prescription coverage is now mandatory for most plans. Yet each carrier has their own formulary and rules for how co-payments will operate. Some carriers demand you take the generic form of the drug if one exists and demands you pay the difference between the cost of the brand and generic drug if you choose to take the brand drug (even if the prescription is written specifically and only for the brand name drug).
While many plans look the same in the new world, the differences are subtle. The questions are numerous and the answers are often complicated and confusing.
If you are interested in considering a small group insurance plan for the first time or replacing your current plan, please call or e-mail me so that we can understand your unique situation and assist you in choosing a plan that best meets your needs and budget.
Click here for more information on different types of health insurance plan types -- Catastrophic, Comprehensive, or HSA.
This web site may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting or tax advice. You may wish to consult a competent attorney, tax advisor, or accountant.