With the legislation of the Affordable Care Act, business owners now have four choices. We can help you analyze which of the four options is right for your business.
1. Continue to offer the same or comparable plan until your renewal in 2014. At renewal, estimates are that rates increase, based on the ACA pricing methodologies, will be in the range of 20-50% or more. Your benefit costs will go up.
2. Shift to a different plan with higher deductibles and/or co-pays. However, different plans offered by other insurance companies also have to follow ACA pricing methodologies, which means there may be fewer options to switch to than in the past.
3. If you employ a pretty healthy team with healthy dependents, you may want to consider a self-funded health insurance plan. Normally reserved for larger employers, self-funded plans fall outside of the pricing methodologies of the ACA. Because of this, you may be able continue to offer similar plans and premium rates if you have a relatively healthy employee group. These plans are structured so that you have a level premium each month. Your premium payments do not rise or fall with claims incurred by your employees. At the end of the year, if you had a good year, you will share in the costs savings with the carrier. If you had a year with excess claims, you are not liable for the additional costs.
While there are carriers who go down to employer groups as low as 5 employees, this option makes the most sense with employer groups with at least 25 or more employees. Please remember that this option is more complicated than typical health insurance plans so be ready to spend some time to learn how this works. If properly structured, this option can help maintain your current benefit costs and reduce the impact of the ACA regulations.
4. Discontinue offering health care coverage and ask your employees to seek individual insurance in the Federally Facilitated Marketplace. Individuals and families who are eligible for premium subsidies will, in most cases, see their insurance costs go down. Employees who are more highly compensated will see non-subsidized premiums go up. You need to survey your employees to determine family size and income so that you can make a fact-based decision on discontinuing your health plan. In many cases, discontinuing your plan will help the majority of your employees and dramatically decrease your costs.
Call us today at 803.708.7405 and let’s schedule a time to meet or conference call. Or, if you prefer, drop an email to Tim@HanburyGroup.com.