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, 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.
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 University. 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:
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
deductible 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.
How to Hire Employees in a Small Business Environment
A successful business is dependent on having competent and self-motivated employees. However, many managers and small business owners are left wondering how to hire good employees. Before posting on job boards, take the time to get organized and clearly define the position. A little preparation will make the hiring process faster, less stressful and more efficient. After you have clearly identified the exact skills needed for the job, it is time to move on to the next step.
To increase the chances that you will find a candidate that is responsible and matched for the job, ask for referrals. Try asking anyone from current employees, suppliers, business partners, or someone in your professional network if they know someone who would be a good fit for the job. Chances are you will get a great recommendation.
The Interview Process
Once you have compiled a list of resumes, begin the interviewing process in two rounds. Stay focused on what you need; don’t worry about being liked and look for personality traits that are compatible with you and your business.
Round 1: The purpose of this round is to identify a handful of candidates that are qualified for the job.
- Schedule the first interviews as close to each other as possible.
- Give each candidate the same amount of time – 30-45 minutes.
- Ask every candidate the same questions so you can compare candidate answers. Working from your job outline, ask questions to determine if they will be successful at each job responsibility.
- Make sure they answer each question so you can write down all the answers in a table for comparison.
- Ask questions that will tell you how they have handled the tough stuff: disagreeing with the boss’s decision; a difficult co-worker or one who doesn’t pull their weight; a disgruntled customer. Keep asking until they give specific answers and provide a successful resolution of the problem.
- Let them know a timeline of when they can expect to hear from you again.
Screening and Identifying Candidates
Round 2: The purpose of this round is to determine who is a good fit for the company; both personality traits and skills should be considered. Before starting this round, determine what a candidate MUST demonstrate to get the position.
- Select 2-3 candidates to come back a second time and let them know the purpose of round 2.
- When you set up the interview, talk with the candidate on the phone. Pay attention to little things like how they answer their personal phone, what their voicemail sounds like, and their response.
- Have employees take a behavior and natural skill assessment such as DISC or Kolbe. This helps you avoid hiring someone just because you like them as well as letting a candidate’s strengths morph the position.
- Confront any troubling concerns and determine if they are valid. It’s better to ask now than to regret the hire later.
- Decide and then sleep on your decision. If it still feels right the next day, make an offer. Let them know you’re excited.
Learning how to hire an employee can be a stressful process. However the process of identifying needs and following a plan will help to ensure you hire someone that is a good fit for your business. Just remember, there are terrific people out there, but hiring well takes patience. Skills can be taught and learned, but attitude cannot. So when looking for a candidate, be patient and persistent in your search until you find the candidate that will help your business succeed.
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Over the 12 years of my coaching career, this article has never been far from my thoughts; it inspires me to be the best coach possible for my clients, a coach that would carry my clients piggyback down a mountain. It was originally published in the Chicago Tribune, during the 1998 Winter Olympics in Nagano, Japan.
I’m excited as the 2012 Summer Olympics are about to begin – thinking of the hours of training it took for the athletes to get there, the careful attention to detail by athletes and coaches, the sacrifices made. I’m hoping to see coaches that inspire their athletes to be their best, that hug them good or bad, that remember to give them a last minute wink, not just another tip. I am always striving to give the same to my clients.
I hope you enjoy this article as much as I do.
View the original article here, I hope you’ll print it out and save it as inspiration.
– Helen Dutton, Business Coach