For many companies, offering health insurance as a benefit is no longer optional. The Affordable Care Act has made it a requirement for companies over a certain size to provide health insurance or face a penalty.
As a result, there are a number of businesses that need to figure out how to offer health insurance plans to their employees for the first time. If your company is in this situation, there are a few points to keep in mind to make sure you handle everything properly.
Figuring Out Your Coverage
If your company has 100 or more FTEs, you should have already set up a plan for 2015. If your company has between 50 and 99 FTEs, you’ll have until 2016 to launch your plan.
When you set up health insurance coverage, it needs to be available to all your full-time employees, defined as workers who average 30 hours or more per week. That doesn’t mean they all need to sign up, though; they just need to be given the opportunity. The plan also needs to cover the children of full-time employees, as long as the children are 26 and younger. However, your plan doesn’t need to cover the spouses of your employees.
Deciding What to Offer
The ACA gives a fair amount of leeway on what kind of health insurance plans you can offer to your employees, but there are two main requirements. First, health insurance plans need to cover at least 60 percent of the expected medical expenses for your employees. Also, part of the coverage needs to be for hospitalization expenses. The government offers a free minimum value calculator that can help you test whether a plan meets these requirements, but most major medical benefits companies will also make sure you are offering an ACA compliant plan.
Also, you need to offer at least one plan that won’t cost your employees more than 9.5 percent of their annual household income. If you want, you can offer more expensive options, so long as your employees are offered at least one plan that meets this cost requirement.
As you’re comparing health insurance options, it’d be a good idea to anonymously poll your employees and see what kind of benefits they’d like in a plan. Give them options such as lower deductibles, a larger medical-provider network or better prescription-drug coverage. That way, you’ll pick a plan that they’ll appreciate more and will be likely to use.
Launching the Plan
You can launch your new health insurance plan any time throughout the year. When you launch, you’ll have a time frame for when employees can review your health insurance plans and decide whether they want to sign up. This is known as the open enrollment period. Every year, you’ll need to set up an open enrollment period so that your employees will have time to review any new options or features. Many companies pick the end of the year for their open enrollment period, but it’s up to you to decide when it’s most convenient for your company.
As you go through this process, you won’t be alone. The insurance companies you contact should have qualified agents who understand the ACA requirements and can help you set up an appropriate plan. If you want to compare a few different insurers, you could work with an insurance broker. Most brokers sell plans from multiple companies, so they can show you a number of different options to track down the best program for your company.
Once you pick an insurance company, they can also help you launch your plan during open enrollment. Most companies offer support, such as sending over an agent to give presentations to your employees and assisting them with the paperwork to sign up.
While setting up a new health insurance program can look intimidating, it’s not as complicated as it seems. By following this advice, you should be able to set up a plan that keeps your company compliant with the ACA while also offering your employees a major benefit.
David Rodeck is a professional freelance writer based out of Delaware. Before writing full-time, he worked as a health- and life-insurance agent. He specializes in making insurance, investing and financial planning understandable.