As a startup or a small business, there are a lot of benefits that you can put off for a later date – massages, cooking classes, on-site laundry, etc. But offering your employees health insurance is not something you should do without. Yes, technically, if you have less than 50 or 100 employees, you avoid having to pay a tax penalty for not offering qualified and affordable health benefits. But you should still offer health benefits anyway.
While cool perks might make your company stand out, you can’t attract and retain top talent if you’re not meeting their basic needs, like their healthcare. And it’s good for business. Not worrying about finding ways to pay for their healthcare costs leaves your employees time to think about other things – like innovative ways to grow your company!
Employee health insurance is not as expensive as you think
There’s a misconception that just because your company is small, then that means that health insurance is a luxury you can’t afford. But that’s definitely not the case. The Affordable Care Act actually gives small business tax credits if they purchase a group plan through the marketplace. Your company qualifies for this tax credit if...
- you pay an average annual wage that is below $50,000 per year,
- have less than 25 full-time equivalent employees,
- and contribute at least 50 per cent of the cost of your employees’ premiums.
For example: Let’s say that you spend $50,000 a year on your employees' healthcare premiums, qualifying you for a 15 per cent tax credit. That will save you $7,500. And year after year, those savings add up. And the savings increase depending on the tax credit you qualify for. So a 20 per cent tax credit will give you a savings of $10,000 a year. That’s real money that’s going into your startup without having to do a pitch meeting or create a slidedeck.
And, if you don’t want to go the group route, individual policies are affordable at an average of $299/month for single coverage and $895/month for families.
There are many employee health insurance plan options
You have quite a few options when it comes to the types of health insurance plans you can offer.
Group health plans via SHOP marketplace. Qualifies your company for tax benefits.
Individual plans. Allows your employees to choose the plan that suits their needs. Then, you can include a Health Reimbursement Plan (HRP) in your benefit package, which would allow you designate a certain amount of money each month that would go toward employee healthcare costs. Individual plans generally cost less than group plans.
Private small group plan. Similar to SHOP marketplace health plans, but you wouldn’t have to go through the marketplace. You won’t qualify for a tax credit, but you will have access to a large amount of healthcare networks.
Self-insured plans. There are many variations of this plan. In a nutshell, your company would act as a health insurance provider and handle your employees’ claims. Using this might be awkward if you’re a small company.
Co-ops. Very similar to self-insured plans. The difference depends on the health insurance laws in your region.
When it comes to employee health insurance, you’re not alone
Being a founder is similar to the art of plate spinning – you’re in charge of keeping all of these different parts moving at the same time and, if one of those parts lose any momentum, the entire system crashes down. It’s a lot of pressure, and leaves little time or energy to deal with the bureaucratic abyss that is health insurance.
Fortunately, there are resources available to you. Health insurance brokers exist to help guide you through the health insurance process. And in addition to helping you find the right health insurance plan for your company in just 5 minutes, our Impact Health team also handles everything else for you. We take care of all the hassles that come with dealing with health insurance – switching plans, billing, employee healthcare questions, etc. – so you can focus on more important things, like building a great company.
Whether you use a traditional health insurance broker or use our services, don’t let misconceptions get in the way of giving your employees health insurance. Having a great culture is not just about the values you plaster on your office wall or a fun company retreat, it’s also about taking care of your work family (and yourself). That way your team can be the best it can be… and that begins with good health.
Let us know if this article was helpful either through Twitter (@impacthealthio) or by dropping a comment below. We’d love to hear from you and answer any questions you may have!