It's open enrollment for ObamaCare and small businesses nationwide are making health insurance decisions. Confused? Overwhelmed? Don't be. Here are three small business ObamaCare tips to help you understand your health insurance options.
Tip #1: Remember, ObamaCare's Employer Mandate Does Not Apply to Small Businesses
If a small business has less than 50 FTE’s, then there's no penalty for not offering traditional health insurance to its employees. See this worksheet on calculating FTEs.
Many small business owners are confused by this provision - but just remember - under 50 employees, no requirement to offer health insurance, and no "play or pay" decision.
Tip #2: Individual Health Insurance Has Changed - For the Better
Under ObamaCare, individual health insurance has new advantages making it better, and more affordable than traditional group health insurance. All small business owners should understand these four advantages of individual health insurance when evaluating health insurance options for 2015:
Portability: Employees may keep their policy when they switch jobs
Choice: Employees choose the policy that best fits their needs, including the network of providers and level of coverage
Savings: Individual health insurance costs less, and employees may be eligible for a premium tax credit to assist them with the cost of their monthly health insurance premiums
Coverage: Individual health insurance covers all essential health benefits, and is available to everyone regardless of pre-existing medical conditions
Read more: What Is Individual Health Insurance?
As such, most (if not all) small businesses are transitioning employees to individual health insurance and contributing to their premium expenses with a Premium Reimbursement Program.
Tip #3: Open Enrollment is a Great Time to Switch to Individual Health Insurance and Premium Reimbursement
Open enrollment is an opportune time for small businesses to switch employees to individual health insurance and start a premium reimbursement program (where the small business reimburses employees for their individual health insurance). That’s because all employees will be able to enroll in individual health insurance coverage.
Wait... Can’t employees enroll in individual health insurance coverage any time? No. Under ObamaCare there are now limited time periods when employees can enroll in individual health insurance. Employees can only enroll in a qualified health plan during either:
An annual open enrollment period (ex: November 15, 2014 to February 15, 2015), or
During a special enrollment period, after a triggering "qualifying life event." Common qualifying life events include losing group health insurance coverage (e.g. the business cancels group health insurance), marriage, birth of a child, significant change in income, etc.
As such, savvy small businesses are taking advantage of the open enrollment period to cancel group health insurance coverage (if they offer it) and switch to individual health insurance and premium reimbursement.
See related infographic: How to Set Up a Premium Reimbursement Program
What tips or questions do you have about ObamaCare? Leave a comment below.