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Is Starting a Small Business a Health Insurance Headache?

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multi-ethnic-team-during-meeting-10066408If you’ve been thinking about turning your hobby into a small business or even buying an existing business, you may be hesitant after you start looking into the health insurance aspects of hiring employees.

Thanks to Obamacare, more small businesses are now required to provide health insurance plans.

That’s all well and good for owners who have the resources necessary to fund such plans, but it bodes ominous for startups that are bootstrapping their business.

In fact, the sole requirement for a health plan can deter new businesses from starting up in the first place.

Don’t worry.

Starting a small business doesn’t have to be a health insurance headache.

There are ways around the Obamacare mandate, just as there are ways to comply with the law in ways that won’t negatively impact your business finances.

Here are some effective ways to get your small business up and running – and keep it running – while dealing with health insurance requirements:

How to Get Around the Requirement

If you have zero funds available for a health insurance plan, yet still need employees to operate the day-to-day tasks of your business, hire independent contractors. Independent contractors are in business for themselves.

As such, they are responsible for their own taxes and health insurance.

They work for you on what’s called a “work for hire” basis. You assign them tasks based on their expertise and specialties, and they invoice you for work that is satisfactorily completed.

Independent contractors don’t technically work for you, and are not your employees. Thus, you are not liable to provide health insurance for them.

The management of your independent contractors needs to be systemized so that in itself doesn’t become an organizational headache.

If this is an avenue you’re interested in pursuing, consider hiring a project manager and investing in some kind of online collaborative software to ensure projects get done on time and under budget.

Keep in mind that if you want or expect your business to grow, eventually you’ll need to move to a traditional employee model.

At that time, you will need to implement a health insurance plan for them, and you’ll need to save in order to manage that scenario.

How to Work With the Requirement

The fact is, there are so many complicated requirements within the Obamacare mandate that it can be compared to the complexity of the overall tax law in general.

As the following article shows, a small business owner, will be hard pressed to research and understand the basic key health insurance terms, let alone come up with a health plan by themselves that satisfies the vast legal requirements.

Your best course of action is to outsource your health insurance plan management to a professional company that specializes in working with small businesses like yours.

Otherwise, the vast amount of your time and the time of your admin team will be spent trying to navigate the minefield of employee health insurance.

Whatever you spend on the health plan management company is tax deductible and the return on investment will prove substantial, even in the short term.

As a small business owner, how are you dealing with the new health insurance requirements?

Photo credit: Image courtesy of Ambro at FreeDigitalPhotos.net

About the Author: Kate Supino writes extensively about best business practices.

Are Your Employees Insured Against Disaster?

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adoccFor those who own their own small business, decisions must be made on a daily basis.

One of the big decisions that can weigh on the shoulders of small business owners is the one of whether to offer group health insurance or not.

For those owners trying to decide one way or another, check out the following FAQ’s for some answers:

Group Health Insurance FAQ

  1. Does a small business have to offer health insurance to its employees?

No. Unless a small business has 50 or more employees, group health insurance is completely optional.

  1. Why should small businesses offer health insurance to their employees?

If a small business owner does decide to offer group health insurance, his or her employees may seek health assistance quicker if a health issue arises and less work and time may be missed. Though health insurance is an expense to the employer, the goal is to save money in the long run by providing good health care options to employee so they can stay healthier and miss less work. If a serious illness or health condition arises, they’ll have security in getting the proper care they need.

Also, some employees may have benefits as one of their own job requirements. A small business owner can miss out on an excellent employee if they do not offer group health insurance. Many employees feel that if their employer cannot provide health insurance, the loyalty of the company is lacking and they may choose to go elsewhere, where insurance is covered.

  1. Should employees have a say in deciding on group insurance?

That would really be up to the employer, but usually it is better if the employer just makes these choices.

Employees have enough to choose from within the given plan; it’s probably best for the owner to go ahead and choose the best health insurance company to fit the needs of the small business and then offer the plan to the employees.

  1. How does an employer/small business owner go about choosing the best company to provide coverage?

The best way to narrow down the different providers is to begin with research. Employers should research online, make some phone calls and have a list ready with questions they have and whatever requirements they have for their company and employees.

Yes, it’s tough for a business owner to make so many decisions every day.

Figuring out his or her employee’s health care is not an easy one.

But if it is a possibility to offer the option of group health insurance, it’s a great way for a small business owner to make employees feel well taken care of.

As a small business owner, how have you gone about covering your employees?

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About the Author: Heather Legg is a writer who covers topics on small business, social media and mindful living.

Making a Healthy Choice When It Comes to Insurance Plans

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ahealthcheckSmall business owners wrestling with the decision of whether to offer group health coverage to their employees have several more months before Obamacare’s small business insurance marketplace is fully operational.

Under the provisions of the Affordable Care Act, businesses with 50 or fewer full-time equivalent employees, or FTEs, are not obligated to provide such coverage for their workers.

However, many companies, both large and small, find they can better attract — and keep — top-quality employees if they offer health coverage as a benefit.

SHOP Postponed

The multiple problems following last fall’s launch of open enrollment for individual health coverage prompted the federal government to postpone for a year the opening of SHOP, known officially as the Small Business Health Options Program.

In the meantime, small businesses that want to move ahead with group health coverage can continue to purchase health plans that meet Obamacare standards from insurance brokers.

Also, businesses in states that have their own Obamacare exchanges can buy coverage in those marketplaces.

Guidelines for Eligibility

If you’re among the small business owners who are opting to wait until SHOP is fully operational, here’s what you need to know about the qualifications necessary for participation in the marketplace:

  • You must have a principal business address within the state where you’re seeking to buy coverage or have an eligible employee with a primary worksite within the state where you’re buying coverage;
  • You must have at least one common-law employee on your payroll other than the business owner, sole proprietor, or their spouses. A common-law employee is defined as anyone who performs services for you wherein you can control what will be done and how it will be done;
  • Your business must have 50 or fewer FTEs, including part-time employees, in order to be eligible to purchase health plans within the small business marketplace. Two part-time employees are equal to one FTE. A couple of years down the road, SHOP eligibility will be expanded to include businesses with 100 or fewer FTEs.

Pay o to 100% of Premium

Interestingly, small businesses that purchase health insurance plans through SHOP are not required to pay any of the premiums for such coverage, according to a Forbes analysis of small business options under Obamacare.

Employers can pay anywhere from 0 to 100 percent of the plan’s premium, and employees must pay the rest. This rule applies only to health insurance plans purchased through SHOP, which is the federal marketplace for small businesses, and is not necessarily applicable to coverage purchased through state-operated exchanges.

For example, employers purchasing coverage through California’s state-operated exchange must pay at least 50 percent of the premiums for such coverage.

No matter whether you plan to pay 100 percent, 50 percent, or none of the premiums for health coverage offered to your employees, there’s a significant tax benefit to buying through SHOP.

Premiums for all such plans are paid with pre-tax dollars. This means that whoever pays the premium — employer, employees, or both — gets a nice tax break.

Control the Coverage

Choosing a health insurance plan from SHOP allows the small business owner to control the coverage that is offered to employees and, as we’ve already seen, to decide how much, if any, to pay toward employee premiums.

If your small business has 25 or fewer FTEs and you decide to pay 50 percent or more of the premiums for health plans purchased from SHOP, you may be eligible for a small business tax credit for the premiums paid.

In order to be eligible for this tax credit, your employees must average less than $50,000 per year in annual wages. Forbes reports that many employers that are eligible for this tax credit are forgoing it because the calculations involved are “slightly cumbersome.”

4 Levels of Coverage

As a small business owner, you can select the level of coverage that will be available to your employees.

As for individual health plans, the four main levels of coverage are Bronze, Silver, Gold, and Platinum.

According to HealthCare.gov, these categories have nothing to do with quality of care but rather describe “the way your employees and the plan can expect to share costs for health care.” In other words, bronze plan coverage would require a higher copay for health services than would be charged under the other metal categories.

HealthCare.gov points out, however, that all plans available through SHOP must provide a set of essential health benefits.

Such benefits include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative services, laboratory services, preventive and wellness services, and pediatric services.

When evaluating health insurance plans in SHOP, you can compare side by side what services are available under the four levels of coverage.

As noted above, all must provide for the essential health benefits, but higher level plans are likely to have additional benefits.

And, of course, higher level plans cover more of the costs of services and thus have lower copays, if any.

Photo credit: Image courtesy of Vichaya Kiatying-Angsulee / FreeDigitalPhotos.net

About the Author: Don Amerman is a freelance author who writes extensively about a wide array of business and personal finance topics.

Keeping Your Employees and Budget Healthy

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asuccessHealth insurance can turn into a crazy puzzle for small business owners.

Where larger companies, by law, must provide health insurance to their employees, small businesses have more leeway; however, this sometimes can just add to the confusion.

The bottom line, if you can afford to offer good medical coverage and health insurance to your employees, no matter how many you have – do it.

What if it’s a financial struggle?

There are instances where offering health insurance may not be feasible to your company financially.

If your company is small, you may not legally have to offer health insurance so you can consider these things in deciding to offer or not….

• Longevity of employees – It’s rare that part-time, independent or short term employees will receive medical coverage, and you’re not obligated to do so. Save the insurance benefits for your full time, permanent employees.

• If you have a tiny company, say just a handful of employees, you are not legally in a place to provide health insurance. If it’s financially not possible, you may choose to wait until your company grows financially and physically to offer health coverage.

• With the new laws in place under Obamacare, many small businesses can qualify for tax incentives by providing health coverage to their employees. Before writing it off as not possible, take a look into what you may gain by offering health insurance.

How does offering health insurance to your employees help you?

If you can, it will pay off in the long run if you provide health benefits to your employees….

• For one, some possible great employees may pass you up for a company that can provide health coverage for them. You don’t want to risk not getting the best because you don’t offer health care plans.

• Your employees may be more apt to stay for the long haul if they feel comfortable with the health care plan you can offer. People will shift companies depending on health care these days, as it a big expense to pay for it on your own. If you can offer it, do so.

• You can help your employees by avoiding lapses in health insurance coverage. When they come on board, you can have your plan go right into effect rather than having your employees search out medical insurance in the midst of taking on a new job.

• Employees with an insurance tie will feel more invested in the company itself and this can improve their satisfaction, engagement and overall well-being with your company and their job.

• You’ll save on sick days and illness within the work place. Those with medical coverage are more apt to visit a doctor than those without. Though you may lose a few hours or a day to a doctor visit, it beats a week or more for those who don’t get the needed medical care. It also can prevent sickness from spreading in the office, like strep throat or the flu – two things which can really take an office down.

No one likes to talk about medical coverage – it’s a big expense and a lot to think about it.

But if you want happy, healthy employees, you probably need to consider it.

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About the Author: Heather Legg is a writer covering topics related to small business, health and well-being, and social media.

Budget for Small Business Health Insurance

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With the introduction of Obamacare and your employees rushing to find out what insurance plans will work best for them, it is no wonder you are wondering how these changes are going to impact your business.

While the world of business insurance is changing, there are ways to keep up with these changes and still provide your employees with the health insurance and benefits they need. But before you do that, it helps to create a realistic budget that lets you offer insurance but still remain within the business assets you have available for these benefits.

Here are some tips and resources to help you get started.

Choosing to Offer Health Benefits

The first step when creating your budget should always be to decide if you will offer health insurance.

While in the past, this was a given, you might want to rethink your plans for 2014 and later years. Obamacare is going to change the necessity of businesses offering health insurance plans and the plans that are available.

However, keep in mind offering insurance is also considered one of the many benefits that entice employees and keep them happy with working for your company.

Some things to note are that health benefits are cost effective when combining with other benefits for your employees and they improve employee morale. This can help your business advance to the next level, improving your productivity level.

Creating Your Health Insurance Budget

Next is the budget factor.

No matter how small your business is, you still need to create a health insurance budget before moving further with the type of health insurance benefits that will be offered to your employees.

Start by looking at your current or past budget, if you have it. Look at different budget templates. You may need to make some tweaks to it, but it’s a great place to start.

Look at your overall business budget and how much you can set aside for health insurance, and start there. Once you have this number, you will be able to then look for insurance plans within this budget.

You may also want to compare the costs of individual versus family health insurance benefits.

Types of Health Insurance Plans

Now that you are working on your budget, think about the types of health insurance that is available to choose from. This includes group health insurance and defined contribution plans.

The group health insurance plans are the most common and are sponsored by your business. You will provide these benefits to your employees, who then get a choice of which they opt in for, changing their premiums, plans, coverage and more.

Instead of paying costs to a specific plan, you can also offer defined contribution health plan which is a more affordable option and is more of a discounted plan, rather than insurance plan.

Moving forward into 2014, you will find that the current health insurance plans you are offering have changed somewhat, but are still available.

If you are fine with your budget and these plans suit your employees, don’t stress about making big changes.

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About the Author: Tina Samuels writes on social media, small business, marketing, and insurance.

3 Small Business Concerns Going Into 2014

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What will 2014 have in store for small businesses?

A few small business concerns certainly present themselves, as owners prepare for some hurdles that come in the way of a successful year.

Looking ahead to 2014, here are a few small business concerns that you will do well to counter if you hope for your small business to succeed.

 1.    Health Care

Without question, health care will remain a concern for small businesses heading into 2014.

Largely due to health care concerns, a recent report found that optimism among small business owners fell to 59 percent in October, where it was as high as 72 percent in the prior month.

While these numbers were affected by the government shutdown, health care remains a big concern of small business owners.

As worded in the report by SurePayroll CEO and President Michael Alter, “the only thing that’s certain about health care reform right now is that it’s causing more uncertainty.”

As the dust settles heading into a new year, small business owners will need to grapple with the implications of health care reform.  Business owners will need to understand and react to how it will affect their business.

Many owners would do well to take this matter seriously.

If these changes are not understood, it would be a smart move to consult with a professional on the business’ options moving forward.

2. The Economy

Indeed: the economy could easily land on any year’s list of small business concerns.  It is clear that 2014 is not bucking the trend.

Based on the previous report, year-over-year nationwide hiring is down 1.7 percent, while paychecks are down 0.1 percent.  While the West (down 2.5 percent), Midwest (down 3.0 percent), and Northeast (down 4.1 percent) were not positive, the South is the only region where hiring is up – at 1.3 percent.

As you might expect, there is not simple solution for dealing with economic difficulties at the small business level.

Savvy budgeting and planning will need to take place, with a careful eye towards difficult areas like health care and insurance.

3.    Taxes

In a recent article from the Washington Post, tax reform is said to target small business concerns.  Yet, as the headline asks, “will it matter?”

With criticisms of the current rate structure and the overall code, there are plenty of hurdles that must be overcome.  Small business owners are awaiting the changes that will occur with tax reform, in order to react and – hopefully – enjoy any benefits that come from its developments.

Similar to the subject of health care, small business owners are advised to stay abreast of relevant changes.

Finding a professional that can be trusted can be an invaluable step towards staying on top of any and all relevant changes.

As a small business owner, what has you most concerned as we head into 2014?

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About the Author: Brian Neese is an author that specializes in content marketing, social media, and SEO.  He writes about technology, how to be first on Google, marketing, much more.