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The Broker Remedy to the Health Insurance Headache

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There’s plenty of gibberish in the news lately relating to the Affordable Care Act: elections, Open Enrollment, Washington Healthplanfinder, the large Employer Mandate, Washington Healthplanfinder Business aka The SHOP Exchange – ENOUGH!  Boil it all down and you’ve got three options for offering health insurance coverage to your employees: individual plans, the SHOP Exchange, and employer sponsored insurance.

Individual Plans

If you qualify, you can get individual plans at a discount through the Washington Healthplanfinder or directly from an insurance carrier.

The downsides are (1) negative tax implications (higher payroll taxes, plus your employees have to pay with post-tax dollars), (2) each employee has to choose and enroll in their own individual plan, and (3) when open enrollment closes on February 15th, 2015 they’ll be locked out, unless they’ve got a qualifying event.

Washington Healthplanfinder Business – The SHOP Exchange

A nice idea, but since there’s only one carrier available statewide, you don’t have options in going down this road. Utilising the SHOP Exchange alleviates several issues that using individual plans present, but without being able to choose between multiple carriers, the limitations outweigh the benefits. However, the only way to take advantage of the Small Business Health Care Tax Credit is through the SHOP Exchange.

To qualify:

  • The maximum credit is 50 percent of premiums paid for small business employers.
  • Eligibility requires the employer to pay premiums on behalf of their employees that are enrolled in a qualified health plan through the SHOP marketplace.
  • You must also cover at least 50 percent of the costs of employee-only health care coverage for each employee. You must also have fewer than 25 full-time employees, whose average wage must be less than $50,000 per year (via IRS.gov).

Traditional Employer Sponsored Health Insurance

This may still be your best option. Few employers will actually qualify for the Small Business Tax Credit and the single SHOP Exchange carrier limits your options. And when the enrollment period for individual plans ends, you probably won’t be able to offer benefits to new employees unless they meet the requirements for a qualifying event.

Certain group plans remove many of these limitations and there are other options to consider:

  1. A minimum employer contribution of 50% versus the previous standard of 75%. The employee portion can be deducted pre-tax, therefore reducing your payroll tax burden.
  2. Some plans allow for “classing out.” If you’re not an applicable large employer, you may still be able to offer things like a manager-only plan with some limitations.
  3. These plans can often be launched year-round.

The good news is once you’ve chosen an option, the workload falls to your broker. Simple employee census data, such as last name, date of birth and home zip code are all that a broker needs to get started. Once your broker has received quotes back from the insurance companies, he or she will present your options and explain the plan benefits to your employees.  Following that, they may even assist with the enrollment process.

If I can help solve your insurance puzzle, give me a call and we’ll get something worked out before open enrollment closes.