It’s something all employees need, yet small business owners often feel too scared to talk about: health care. Understandably so - health care costs seem to always be rising and the idea of figuring it all out can be quite overwhelming.
But did you know? According to the AICPA, 80 percent of workers would keep a job with benefits rather than take one that offered more pay and no benefits.
Exploring health care benefit options for your employees is pretty important.
The good news is, it doesn’t have to be so scary. We’ve found four common myths about health care and identified realistic solutions to help put your mind at ease.
1. My business is too small. I don’t need to offer benefits.
If you have a handful of staff members, you may think it’s unnecessary to offer health insurance. A small employer, with as few as two employees (one full-time, plus the owner) can provide benefits to employees.
Did you know? You can gain assistance through a broker or agent and seek small business health care options through private insurance or the Small Business Health Options (SHOP) Marketplace at Healthcare.gov. If you have two or more enrolled, you can offer a group health plan.
2. I can’t afford to offer benefits.
When budgets are tight, eliminating health care benefits can be an easy fix. But there are options out there that really don’t have to break your bank. Even putting $100 towards a plan can show employees you care, and are trying to make it work with limited resources.
For example, have you ever heard of a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)?
A QSEHRA is an employer-sponsored reimbursement program offering a payroll-tax-free benefit to the employee, creating a tax-deductible business expense for you. This benefit provides reimbursement for your employees’ individual medical plan premiums and qualified out-of-pocket medical expenses for themselves and their families.
It’s available to small employers who don’t offer group medical, dental or vision insurance – and you choose the annual benefit amount (though IRS annual limits apply).
If you do decide to offer a group medical plan for your employees, there are generally many plans available in your area. You can decide on plans that are very rich in benefits to those that come with higher-deductibles and can include pre-tax accounts like Health Savings Accounts (HSA) to help your employees cover their annual out-of-pocket medical expenses.
Premiums are impacted by many factors but, as a small employer, you can choose to fund those premiums based on your cashflow and banking needs.
3. Benefits and enrollment sessions are too hard to understand.
Can you define the terms: deductible, co-pay, coinsurance, and out-of-pocket maximum? Then congrats, you’re ahead of 96 percent of Americans who took a recent PolicyGenius survey. Only four percent were able to correctly define all four terms.
When you factor in all the jargon, the enrollment period dates, qualifications, etc., health care really can be tough to understand.
Consider your options – like working with a broker. This cost-effective consultant can clarify your options and help you make smart decisions. Most benefits brokers will provide ongoing benefit education as part of their services. They will also be able to help employees better understand these terms and how their specific plan will work. Plus, they can act as an advocate between the employer and insurance carrier.
Do you want to make sure that all of your employees gain understanding of your benefit plans? There are other service providers that can be outsourced that solely provide benefit plan education on a one-on-one basis to each employee. Direct interactions like these can only ensure that your employees are more fully engaged and empowered to use the benefit you are offering.
4. I shouldn’t have to provide benefits – it’s not a legal requirement.
It’s true – according to the Affordable Care Act (ACA), if you have less than 50 full-time and/or full-time equivalent employees, and are not considered an Applicable Large Employer, you are not legally required to offer health care.
However , if you want to find and retain great talent, offering benefits should be on your strategy list. According to a recent survey by the Society for Human Resources Management (SHRM), retention (72%) and recruiting (58%) were the top reasons companies increased their benefits.
Ask the question to yourself small employer – Am I able to attract the type of employees that I need for my organization while not offering benefits? Am I losing good employees to a competitive firm due to not offering benefits?
Just because you may not be required to offer benefits does not mean that you shouldn’t.
- Perform an analysis - Be sure to understand how your current employees are enrolling in benefits.
- Review other organizations that you may compete for labor and determine if offering or not offering benefits will impact good candidates from looking and joining your company.
Not having the legal requirement provides more flexible options for small employers. Take advantage of that. But definitely perform an assessment as to what would be best for your organization.
Doesn’t it feel good to debunk myths that stress you out? There are affordable options for providing health care benefits to your small business employees. And it’s important that you consider offering benefits - as we know it’s critical for recruiting and retention. If you’re still unsure of where to start, we have a solution for you.
Let PrimePay help take the stress out of benefits administration.
Simplify your administration with PrimePay’s QSEHRA services. Health care has never been so easy.
Administration services include:
- Benefit plan consultation and analysis
- Comprehensive compliance documentation
- Support for all substantiation requirements
- Dedicated service team
- Portal and mobile app access for your employees.
Click here to learn more or fill out the form below.