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How to Choose the Right Benefits Plan for Your Employees

Selecting the right health plan for your employees is more than just a business decision—it’s a vital component of your company’s success. Balancing top-notch benefits with financial sustainability is key. Here’s a comprehensive guide to help you navigate the process effectively:

Understand Your Coverage Options

Fully-Funded Plan

Opt for a traditional route where you pay a monthly premium to an insurance company. This company handles claims from your employees. Big insurers like UnitedHealthcare or Aetna are common choices.

Self-Funded Plan

Consider sponsoring the health plan yourself. Set aside funds to cover employees’ claims and purchase stop-loss insurance for protection against unexpected high claims. This option shields you from arbitrary premium hikes.

Evaluate Your Budget and Needs:

  • Determine your overall budget and what you can afford per employee.
  • Consider how much of the premium your employees can cover.
  • Think about the types and levels of coverage your employees expect. Conducting employee healthcare surveys can provide valuable insights.

Shop Around for Plans:

  • Begin your research on carrier websites, especially if you’re new to selecting health insurance.
  • Small businesses with 50 or fewer employees can explore options through the Small Business Health Options Program (SHOP).
  • Look beyond benefits and quotes. Consider what additional services or technologies the insurer offers for both your business and employees.

Choose the Right Insurer:

Opt for an insurer that offers flexibility and meets your specific needs. For instance, SBMA Benefits provides versatile plans tailored to each business.

Pros of Minimum Essential Coverage (benefits plan) Plans:

Affordability: benefits plan plans are often more budget-friendly for both employers and employees. They typically have lower premium costs compared to comprehensive health insurance plans, making them an attractive option for small businesses and cost-conscious individuals.

ACA Compliance: One of the primary advantages of benefits plan plans is their compliance with the ACA’s individual mandate. By offering benefits plan to your employees, you can avoid penalties associated with not providing health coverage, thus ensuring legal compliance.

Preventive Services: benefits plan plans cover essential preventive services at no cost to the employee. This includes vaccinations, screenings, and wellness check-ups, which can help identify health issues early and promote overall well-being.

Employee Retention: Offering any form of health coverage, including benefits plan plans, can enhance employee retention. It signals to your workforce that you care about their health and well-being, which can lead to increased job satisfaction and loyalty.

No Pre-existing Condition Exclusions: benefits plan plans cannot deny coverage or impose pre-existing condition exclusions. This means that employees with pre-existing medical conditions can access necessary care without fear of rejection.

Minimal Administrative Burden: benefits plan plans are relatively straightforward to administer compared to more comprehensive health insurance options. This can save businesses time and resources.

Cons of Minimum Essential Coverage (benefits plan) Plans:

 

Limited Coverage: While benefits plan plans meet ACA requirements, they offer limited coverage compared to more comprehensive health insurance options. They often cover only preventive services and may not provide coverage for major medical expenses, such as surgeries or hospital stays.

No Minimum Value: benefits plan plans do not meet the minimum value standard set by the ACA. This means they may not cover a substantial portion of medical costs, leaving employees with significant out-of-pocket expenses for major healthcare needs.

Employee Dissatisfaction: Employees may be dissatisfied with benefits plan plans due to their limited coverage. This can lead to frustration when they discover that their essential medical needs are not adequately covered, potentially affecting morale and job satisfaction.

Limited Network: benefits plan plans may have a restricted network of healthcare providers. Employees could find that their preferred doctors or hospitals are not included in the plan’s network, limiting their choices for care.

Not Ideal for All Businesses: benefits plan plans are best suited for businesses with a young, healthy workforce and those primarily seeking ACA compliance at a minimal cost. For businesses with diverse employee demographics and varying healthcare needs, more comprehensive plans may be a better fit.

FAQs about Minimum Essential Coverage (MEC):

Does a MEC plan provide minimum value?

Some MEC plans offer minimum value coverage, but not all. Minimum value coverage is a higher standard than MEC and doesn’t impact MEC compliance.

How does a MEC plan affect employer taxes?

MEC plans may impact employer taxes in various ways, such as potential eligibility for certain tax credits or penalties for not providing adequate coverage. It’s essential to consult with a tax advisor or accountant to understand the specific tax implications for your business.

What constitutes proof of minimum essential coverage?

Proof of minimum essential coverage typically includes documentation provided by the insurer or employer, such as an insurance card or certificate of coverage. Employees may also receive Form 1095-C from their employer, which serves as proof of coverage for tax purposes. Additionally, individuals can obtain proof of coverage from their insurance company or through online portals provided by their insurer.

By following these steps and understanding the basics of MEC, you can confidently choose a health plan that benefits both your employees and your business’s financial health. Making informed decisions regarding employee health coverage is crucial for the well-being of your workforce and the success of your company.

Any Questions?

We serve employers who want to offer their employees affordable benefits. We simplify the complexity of providing those benefits and ensure compliance with the Affordable Care Act. We provide affordable benefits for the everyday person. We are different because of our personal service, speed of implementation, and innovative approach to providing benefits coverage.

Learn more about us and our benefit plans, here.