During the 2015 open-enrollment period, employers have many different things to consider when renewing group health insurance. Many of the health law’s provisions impact how employers provide coverage to their employees and how they must continue to maintain it. There are multitudes of ways to provide such coverage, depending on the size of your business. For the purpose of this post we will look at the options available to small employers (<50 FTEs), mid-sized employers (51-99 FTEs), and large employers (100+ FTEs).
Small Employers (<50 Full Time Employees)
Firstly, remember - If you remain under 50 FTEs you are not required to provide health insurance.
If you decide to buy your employee health care through your state’s small business exchange, you may be able to claim a tax credit for up to 50% of your costs. This “Small Business Health Insurance Credit” is only for specific plans offered through the marketplace or direct from carriers and must be on the list of qualified plans. The tax credit applies to companies with fewer than 25 employees and average annual wages below $50,000.
There has been a recent increase in small employers considering abandoning group plans and having employees obtain individual plans through the state’s individual exchange. These employers believe reimbursing or subsidizing employees for their individual plans may be less expensive.
Mid-sized Employers (51-99 Full Time Employees)
Midsize groups with 51-99 employees will get some breaks in 2015. These group renewals may be the closest to ‘business as usual’ as it gets. These businesses will be exempt for another year from the Employer Mandate.
Large Employers (100+ Full Time Employees)
Large groups with 100 full time employees or more may want to consider retaining or increasing benefit offerings to ensure their plans meet Minimum Essential Coverage.
Be sure to correctly calculate your FTE’s for the New Year. Remember, a full time employee (FTE) is a permanent employee who works an average of at least 30 hours per week or 130 hours per month.
Grandfathered or High Deductible Plans
For the employers whom may still be offering grandfathered plans or a basic high deductible plan with minimal benefits, you may face rate hikes at renewal. Be prepared to restructure your benefits or consider offering multiple plans when renewing your group health insurance. You can also consider offering a ‘base’ plan and allow employees to choose from a suite of plans with less or more benefits than the base plan.
For those employers that offered coverage through SHOP during 2014, renewals will be fairly straightforward. Renewals will be handled online as instructed, while renewals for coverage purchased through an agent or broker will be their responsibility.
As you prepare to announce your renewal offering, consider the deadlines that govern SHOP renewals. You must submit your final enrollment roster by the 15th day of the month for coverage to start the first day of the next month.
Alternative Options to Renewing Group Health Insurance
Alternative options to renewing group health insurance exist for many employers regardless their size. Switching to a Self-Funded health plan can allow greater flexibility in designing your plan, while mitigating some of the new costs associated with the new health law.
For more information about how a self-funded plan may be able to replace your existing plan and offer greater savings potentials or for assistance throughout renewing your group health insurance, contact one of our Benefits Advisors here.