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Posts Tagged ‘small business health insurance’


It’s Not Too Early to Plan for How Health Insurance Reform Will Affect Your Small Business

August 2nd, 2011 ::

By Karen Axelton

In the recent Armageddon-themed thriller starring John Cusack, “2012″ is the year to fear, but when it comes to health insurance reform, 2014 is the big date that small business owners need to be wary of. Why? Because that’s when the “pay or play” aspect of the Patient Protection and Affordable Care Act will take effect.

Pay or play means that business owners have to choose between offering their employees health insurance (play) or paying a fine—in most cases, $2,000 annually for each full-time employee or equivalent. (The fines don’t kick in until you have more than 30 full-time workers.) And while 2014 may seem so far away that you don’t need to worry just yet, as CFO Magazine points out, the time to start planning is now.

For one thing, when you’re considering your health coverage for the year 2014, you’ll need to be negotiating that with your provider in 2013. More importantly, the equation to consider isn’t a straight tradeoff between the cost of premiums vs. the $2,000 fine. There are many other costs and benefits to consider, including:

  • The tax deduction you receive for the employer-paid portion of health-care costs
  • Increased FICA and workers’ comp taxes (because if health-insurance premiums aren’t deducted from workers’ paychecks, they’ll have more taxable income)
  • The cost of coverage offered by state insurance exchanges (scheduled to be rolled out in 2014)
  • How you could cut costs without eliminating coverage (perhaps by eliminating coverage for dependents or restricting what is offered)

Money isn’t the only factor in this decision. If you are in a competitive industry, cutting out coverage altogether may make it impossible to find qualified workers as they flee for big companies with better benefits. If your work force is mostly older employees who have valuable knowledge but more health issues, you may not want to reduce or eliminate coverage.

CFO notes that under one provision of the law, even companies with coverage could face fines if their coverage is deemed “poor quality.” With the presidential election coming up in 2012, it’s possible the rules and/or timetable for health care reform itself could change significantly. But it’s not too early to at least explore your options with your insurance provider and your accountant (and feel out some other providers at the same time).

Image by Flickr user toca boca (Creative Commons)

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Posted in Accounting and Taxes, Business Law, Compliance, Small Business, small business, Workforce | No Comments »

How Do Employee Benefits Help Small Businesses?

July 26th, 2011 ::

By Maria Valdez Haubrich

If you offer benefits to employees at your small business, you should be pretty proud of yourself. Benefits aren’t cheap, and they’re a great way to attract and retain satisfied employees. But a new survey from insurance provider Aflac shows that business owners aren’t necessarily getting all the benefits they think they’re getting from employee benefits.

The 2011 Aflac WorkForces Report surveyed employers and employees at companies in of all sizes. Small business owners reported their main goals when offering benefits are:

  1. taking care of employees;
  2. doing the right thing; and
  3. retaining employees.

How good of a job do small business owners think their benefits packages are doing at keeping employees happy?

What challenges are small companies facing when it comes to benefits? Not surprisingly, understanding health care reform was the top benefits challenge for 64% of small employers, while offering quality benefits within a budget was the second-largest benefits challenge for 63% of small companies.

However, employees were less satisfied with their benefits than small business owners think they are. About half (51 percent) of small business owners say their benefits packages meet employees’ needs “extremely” or “very” well. However, only 37 percent of small business employees agree.

There are some reasons for this discrepancy. The study found that small companies are less likely that midsized or large ones to give employees a voice in choosing benefits that will be offered. They are also less likely to provide voluntary benefits (extras, such as life insurance, that employees can choose to buy on their own).

But part of the problem is not what small businesses are offering, but simply the way they’re communicating about it. Almost half (46%) of small company employees say their companies don’t communicate enough about employee benefits packages. And 39% of employees “strongly agree” that better communication about their benefits would make them more loyal to their employer.

What’s the lesson for you? First, consider offering your employees some input into the benefits you provide. Of course, let them know that you can’t satisfy everyone – but getting their input could make them feel better and even save you some money if, for instance, you find out that no one really cares about having vision insurance or some other benefit you’ve been offering.

Second, let employees know what you’re doing for them. Many workers don’t realize how costly insurance and other benefits can be. Explain your benefits programs, how employees can get the most from them, and how much your company is contributing toward them. It’s likely to make everyone feel a bit more appreciative—and that will pay off in greater loyalty.

Image by Flickr user Ano Lobb (Creative Commons)

 

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Posted in Small Business, small business, Workforce | 3 Comments »

Health Insurance Exchanges Get Off to Slow Start

July 21st, 2011 ::

By Maria Valdez Haubrich

For small business owners—especially sole proprietors, freelancers or people with ongoing health issues—one aspect of the sweeping health insurance reform legislation passed in 2010 was very promising: The bill called for states to create health insurance exchanges that would make it easier for people who traditionally have a hard time getting insurance coverage to purchase it.

Slated to be implemented January 1, 2014, the American Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchanges would be administered by a governmental agency or nonprofit organization and would allow individuals and small businesses with up to 100 employees to purchase qualified coverage. For many small business owners who have trouble obtaining affordable coverage for themselves or their employees, this is good news. However, states will have to create these exchanges themselves, and there’s the bad news.

HealthWatch blog recently reported that states have been lagging behind in establishing SHOP exchanges. If states don’t set up their own exchanges in time, the federal government will take over and set up exchanges for them. So far, governors of only 10 states have signed legislation establishing SHOP exchanges. Some governors who are politically opposed to health insurance reform have purposely delayed the move, such as Florida Governor Rick Scott.

While 2014 sounds like it’s coming up soon enough, states will have to face the music in  2013. That’s when the Department of Health and Human Services (HHS) will evaluate the progress each state has made in setting up an insurance exchange and assess where the federal government may need to step in to get things moving.

Further slowing the progress, preliminary rules for setting up exchanges were just released last week, Kaiser Health News reports; final rules won’t be released until later this year after industry groups, consumer advocates and others have had an opportunity to comment.

Obviously, even states in which politicians don’t agree with the central tenets of health care reform want to keep control of their exchange creation. And HHS, too, would prefer that the power over creating exchanges rest with the states.

Creating exchanges is politically charged. Health insurance companies want states to have lots of flexibility in how they design their exchanges, and want to have a seat on the oversight boards. In contrast, consumer groups don’t want to see insurers on the boards unless they can pass strict conflict-of-interest tests. Also undecided is whether the federal government will ask states to select the insurers that can participate in the exchange (and negotiate prices and other issues with those insurers) or whether exchanges will have a more flexible structure, where any insurance company that meets minimum standards set by the law can participate.

What will happen in the coming year? It remains to be seen, but if you are interested in another option for purchasing small business insurance, you may want to find out what’s going on in your state, and if things aren’t moving fast enough, let your state legislators know how you feel.

Image by Flickr user Mykl Roventine (Creative Commons)

 

 

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Posted in Business Law, Compliance, Small Business, small business, Workforce | No Comments »

How Can You Keep Health Insurance Costs Down?

July 1st, 2011 ::

By Rieva Lesonsky

They say two things are certain in life: death and taxes. To that, I’d add a third: rising health-care costs. According to the latest Behind the Numbers study by PwC’s Health Research Institute, which monitors medical costs, the cost of health care is projected to rise by 8.5 percent next year, an increase from the 8 percent rise in 2011.

But be thankful for small favors. PwC says costs would actually be increasing more, if it weren’t for factors including:

  • Cost sharing. More employers are shifting rising medical costs to employees by requiring them to contribute more to coverage or use high deductible plans (the fastest growing type of plan in 2011).
  • Price tiering for out-of-network providers. Rising deductibles mean fewer workers will visit more costly out-of-network providers.
  • Brand-name drugs going off patent. Generic use will increase in 2012 because some of the most popular drugs go off patent that year. This will cut costs.

PwC says employers who make key changes to their health coverage can keep cost increases as low as 7 percent. Here’s what the employers surveyed say they are doing to that end:

  • Eighty-four percent of employers say they will change their health coverage to offset new costs related to health insurance reform.
  • Eighty-six percent of employers say they are going to re-evaluate their benefits strategy as a whole.
  • Fifty percent of employers say they may significantly change or eliminate company subsidies for dependents’ health insurance.
  • Eighty-nine percent of employers say they will increase employee health and wellness efforts.

Employers will have their work cut out for them with that last one, because PwC also found that delays in getting medical care, plus pent-up stress from the recession, are causing U.S. workers to have more health problems. As a result, they’re using medical services at an increased rate.

One reason medical costs increased at a relatively low rate in 2011 and 2010 was because so many Americans were out of work and didn’t have medical coverage. Even those with medical coverage often avoided treatment because they couldn’t afford copays or other costs. But now, stress-induced illnesses are on the rise, and employees can no longer put off treatment, so they’re visiting doctors in larger numbers. And because of delays, conditions have worsened, requiring more intervention and higher costs.

If you’re wondering how health insurance reform will affect your insurance costs in 2012, the answer is that it really won’t. PwC says the next major round of changes, which includes the creation of health insurance exchanges, subsidies to buy private insurance, requiring employers to offer insurance and requiring individuals to buy insurance, won’t begin until 2014.

Image by Flickr user Toca Boca (Creative Commons)

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Posted in Small Business, small business, Workforce | No Comments »

The Benefits of Employee Benefits

May 27th, 2011 ::

By Rieva Lesonsky

With the economy improving, your employees are likely considering their job options for the first time in the last few years. If you’re worried about keeping key employees on board, attracting new employees to help you handle increased demand, or simply rewarding the employees who have worked hard for you during the recession, what employee benefits will have the best results?

The 2011 National Workplace Benefits Survey, recently released by HR consultancy Employers Group, surveyed more than 400 employers to determine the current state of employee benefits. Among the findings:

  • Despite the still-rocky economy, nearly 70 percent of companies do not plan to cut their benefit packages for employees in the coming year.
  • For those who are increasing benefits, the biggest focus is on health coverage, with 24 percent of companies planning to increase funding in that area.
  • Retaining employees is a key goal behind companies’ benefits strategies in 2011.

Companies offer benefits for a range of reasons, including:

  • Retain existing employees, 39 percent
  • Motivate existing employees, 25 percent
  • Attract new talent 19 percent
  • Reward existing employees, 17 percent

The survey also determined the most popular benefits offered by companies. Medical insurance, dental insurance and 401(k) or other retirement plans topped the list, all offered by more than 95 percent of companies. Also high on the list were life insurance, prescription drug coverage and vision coverage, offered by more than 90 percent of responding firms.

Clearly, medical coverage and retirement are big issues for employeesyou’re your company can’t afford to offer health care coverage, consider offering employees some type of financial assistance with health care, such as a monthly amount they can put toward the coverage of their choice. (Talk to your accountant about your options for providing health care coverage under the new health insurance laws.)

A big part of retaining employees for your small business is simply showing that you care. While formal employee assistance/counseling programs (which help with issues such as drug and alcohol addiction) were offered by more than 70 percent of responding companies, if this is too costly for your small company, simply being understanding of employees’ personal problems and accommodating their needs is sometimes all that’s required. (Talk to your attorney if an employee’s personal issues are affecting their work performance to a substantial degree.)

Finally, some of the desired and most popular benefits are ones that even small companies can often provide. A mobile phone or PDA was offered by 65 percent of companies—surprisingly low, if you ask me. A mobile phone/PDA can not only help your employees feel trusted and professional, but also benefits your business by helping them work more efficiently. And entertainment discounts, offered by more than 60 percent of companies, can often be negotiated with providers such as movie theaters and local amusement parks.

Last, but not least, some 48 percent of companies offered an education supplement. Paying for your staff’s continuing education is probably beyond your budget, but you can offer them opportunities for professional learning via industry seminars, webinars and conferences, which are sometimes low-cost or even free. Try saving money by sending one employee to a seminar or conference, then have him or her report back on what was learned and train coworkers.

Image by Flickr user Tess Watson (Creative Commons)

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Posted in Small Business, Workforce | 5 Comments »

Small Biz Resource Tip: Sam’s Club: The Prevention Plan

May 26th, 2011 ::

Sam’s Club: The Prevention Plan

Studies show businesses with an informative and proactive wellness plan for their employees can help cut down on the overwhelming costs associated with a sickly staff. But figuring out how to set up such a plan can be time consuming. Sam’s Club has recently begun to offer a packaged health management program for small businesses that includes a Resource Center offering information on creating a healthy work culture plus information on how to apply for state and federal wellness grants. The Prevention Plan from U.S Preventive Medicine, a leader in disease prevention, attempts to encourage small businesses to adopt health management programs and offer incentives to employees who lead a healthier lifestyle.

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Posted in Resources, Small Business, Workforce | 1 Comment »

Adding Employee Wellness Benefits Can Help Your Small Business

March 24th, 2011 ::

By Maria Valdez Haubrich

With the rising costs of employee health care always an issue for businesses, many companies both big and small are emphasizing employee wellness to help keep insurance costs down. A recent study by Principal Financial Group and Harris Interactive reveals that employees are giving wellness programs a big thumbs-up.

The Principal Financial Well-Being Index surveyed small and midsize U.S. companies and found that benefits related to wellness and weight loss were among the most coveted by workers. The percentage of employees who use weight-loss programs offered by their employers increased to 53 percent in 2010, up 25 percent from 2009.

Other benefits employees would love to receive are fitness facilities (27 percent), discounts on fitness center memberships (24 percent) and weight-loss programs in the workplace (17 percent).

Lee Dukes, president of Principal Wellness Company, a subsidiary of the Principal Financial Group, notes that “Americans in general are more aware of the impact of obesity on their health” and that employers as well as employees are increasingly seeking out this type of program.

Employees seem to be growing more aware that they need to be responsible for their own health to help keep costs down. Some 68 percent used an employer’s personalized action plan to manage high-risk health conditions (up 21 percent from last year), and 84 percent used blood-sugar screenings (an increase from 66 percent in 2009).

If you offer health insurance to employees, check with your plan administrator to see if the plan offers any type of wellness benefits. Some plans offer things like fitness center discounts, discounts on massages or acupuncture, or other assistance to maintain good health. If you don’t have health insurance for your staff or your insurer doesn’t offer wellness programs, contact local hospitals to see if they have any programs for business. You may be able to get hospital staff to hold educational sessions about weight loss, stress relief or other wellness concerns at your company. Another option: See if you can barter with local small businesses that provide wellness-related services like yoga classes or stress management to hold events at your company.

In addition to keeping your insurance costs down and lessening absenteeism, wellness benefits have some other, well, benefits. According to the survey, 43 percent of employees say wellness programs make them want to work harder; 48 percent say the benefits make them more loyal to their employer; and 38 percent say wellness benefits make them more productive on the job.

Image by Flickr user Coni Dutka (Creative Commons)

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Posted in Entrepreneurs, Health and Wellness, Small Business, Workforce | 1 Comment »