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Going Solo: What the Insurance Changes Mean For You

If you are a solo-prenuer, you have the small luxury of not having to worry about health care responsibilities for your employees.  However, did you know that the Affordable Care Act will still have an impact on you as you responsible for getting insurance?  Let’s take a look at what your options are as a solo-prenuer starting 2014:

  • Obtain coverage through an employer if available 
    • Do you have a part time job that offers coverage?  Can you get on your spouse’s insurance?
  • Buy an individual plan through either the market exchange or the private market
  • Go uninsured
    • You will pay a penalty unless you quality for an exemption

If you decide to purchase an individual plan, you can either contact a broker or use the online market place. The Health Benefit Marketplace (also known as the Exchange) is where individuals will be able to purchase health insurance.  This online platform is similar to SHOP, the marketplace that small business will use to purchases their insurance. 

If you want to learn more about the online market place, upcoming changes, and your health care options, visit some of the sites below.  I encourage you to get more information straight from the source such as the IRS, and state department of insurance, rather than a third party.   With that said, here are some links to more information:

Still not sure where to go for more information?  Use this to get started:

Health Care: The Big Picture for Big Business

44% of employers offer health insurance to employees, first and foremost, because they feel morally obligated to do so (eHealth, Inc., March 2013)

Health InsuranceIf you don’t fall under the government’s definition of ‘small business’ (meaning 50 or fewer employees), then you need to pay attention to the health care changes as these changes will have a significant impact on your company!  Starting in 2014, ‘large groups’ or business with more than 50 employees will have three options for health care coverage.  They are:

  • Offer health coverage: either ASO or fully insured
  • Offer partial  coverage:  This option is only available (without penalty) in 2014)
  • Stop offering coverage:  let employees buy individually and risk paying the employer penalty

If you want to learn more about the upcoming changes, plans, and options, you can visit the sites below.   I encourage you to get more information straight from the source such as the IRS, and state department of insurance, rather than a third party.   With that said, here are some links to more information:

Small Business Health Care Survival Guide

54% of small businesses say health care costs are hurting the business environment “a lot” (Gallup poll, January 2013)

By now you are more informed about what is required of you under the new Affordable Health Care Act.  (You have been doing your research haven’t you?)  So let’s start discussing some specific rules that apply to you if you are a ‘small group’ or small business.

small business health careSmall business, as defined in the eyes of the Affordable Care Act, is 50 or fewer employees.  If you fall under this definition, this means that you will have three health insurance options for 2014.  They are:

  • Offer a fully insured plan
  • Stop offering coverage and let employees buy through the Individual market
  • Offer an ASO plan

If you want to offer a fully insured plan, you can either offer a plan through the SHOP exchange or through the private market.  SHOP stands for Small Business Health Options Program and helps employers better predict insurance expenses.  Only businesses with 50 or fewer employees are currently eligible to participate in SHOP.  Enrollment begins October 1st and business can enroll directly by visiting SHOP at: www.healthcare.gov or they can contact a broker.

A tax credit is available for small business who quality.  To qualify for the tax credit the business must: have fewer than 25 full time equivalent employees, have average annual wages less than $50,000, and the business must pay for least half of the employees (self-only) premium costs.  If your business meets these requirements, then you may be entitled up to a 35% federal tax credit in 2013 and 50% (SHOP participants only) in 2014 if you are a for-profit entity.  See http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers.

If you want to learn more about the upcoming changes, tax credit and plans, you can visit the sites below.  As always, I encourage you to get more information straight from the source such as the IRS, and state department of insurance, rather than a third party. 

Affordable Health Care: Do you know your Responsibilities?

Small businesses owners face tough decisions every day; balancing employee benefits and financial prosperity is often one of those tough decisions.  Employers wanting to offer their employees benefits have often been discouraged by too few choices, high premiums, and unpredictable rate changes.  However, with the Affordable Care Act, (like it or not), things are changing and you have responsibilities as a business owner.  Are you educated and prepared for the upcoming changes?

62% of small employers acknowledge not understanding exchanges at all (eHealth, Inc., March 2013)

In an effort to become more educated and prepared, I recently attended an Affordable Care Act forum at Southern NH UniHealth care reformversity.   If you haven’t had a chance to attend a seminar, I hope that some of the information and resources provided in the post will help get you started in the right direction.  First, let’s review some basic information:

  • Enrollment begins October 1st
  • Coverage doesn’t begin until January 1st
  • The rules are different if you have 50 or fewer employees
  • There is a tax credit for business with fewer than 25 full time employees
  • Noncompliance puts you at risk for a penalty

 

Starting in 2014 under the Affordable Care Act, insurance companies will have to play by a new set of rules.  Insurance companies will no longer be allowed to charge higher rates for women or individuals with pre-existing conditions.  They will also no longer be allowed to deny coverage to individuals with chronic and pre-existing condition or place annual dollar limits on coverage.

These are only a few of the health care changes that will be starting in 2014.  If you are ready to learn more, I encourage you to get more information straight from the source such as the IRS, and state department of insurance, rather than a third party.   With that said, here are some links to more information:

Small Business Benefits, Balancing Employee Happiness and Cost

With pieces of the Affordable Care Act (ACA) about to go into effect, this is a good time for owners to look at the small business benefits they offer to employees.

Small business owners are struggling with rising healthcare costs, and balancing the financial implications to their company with keeping their talent happy. How do they know the right mix of benefits? When should they ask employees to be responsible for a bigger piece of the cost? Employers are hesitant to small business benefits, yet absorbing the ever-increasing costs are hurting their bottom line.

Back in my corporate days when I oversaw Human Resources, creating the benefits package honestly felt like we were gambling with employees’ financial and health future. The health insurance co-payment and

small business benefitsdeductible could have significant financial impact in family lives. While young employees often see little value in life and disability insurance, their potential impact is enormous, although hopefully less called upon. Retirement benefits are increasingly more important to employees, yet business owners often believe retirement to be cost-prohibitive. How do business owners know what the right decision is?

Ask. As in your employees – the people you are trying to help. Personnel costs are often the largest expense and can potentially have the most significant impact on the success of your business so you need to get it right. Yet all too often the benefits’ decision is made in a vacuum, without the input from the people they’re designed to benefit! Ask your employees what healthcare elements are most important to them – out of pocket costs, routine coverage, or catastrophic coverage. Tell them that you will make the decision but that you would like their input.

At first glance, this process may seem risky to your bottom line. Compare headcount costs as a percentage of revenue over several periods; is it growing? Flat? Decide what your business model and you, the business owner, can live with for headcount costs. As long as benefits fit within that framework, and you’ve gotten input from your staff, don’t stress the details. Ask employees’ to share in the costs from the get-go and always let them know the benefits’ cost that the business is picking up.

Retirement plans have the feel of being expensive, yet with the tax credit now available for setting up a plan (check http://www.irs.gov/publications/p560/ar01.html for an overview) a 100% employee-funded plan can have no financial impact to your business. While employer contributions are not required under all types of plans, the contributions are tax-deductible and are a relatively low cost/high value benefit.

Don’t underestimate the value of group life insurance and long-term disability. These costs are miniscule compared to health insurance and yet have the potential to save an employee’s family. While not often called upon, these provide peace of mind to your staff. Peace of mind means your staff can be more focused on the task at hand – growing your business.

Helen Dutton, A Vision of Your Own, has provided business and personal coaching for small business owners since 2000, providing online and face to face coaching for entrepreneurs, small business owners, start-up businesses as well as established businesses across the country. Clients come from New Hampshire, her home state, but she has also acted as a mentor to business owners in Atlanta, Chicago, Los Angeles, the Denver area, and closer to home in the Boston area. Helen helps her clients develop their small business ideas, create marketing plans, improve operation efficiency, build customer service systems, build management and leadership skills, and develop confidence as a business owner. Helen provides business tips and resources through her blog and her newsletter, where you can also find business templates to help your business prosper.