January 1st is quickly approaching and many major provisions of the Affordable Care Act (ACA) will be taking effect. Small businesses are considering now how to offer the best benefits at the most affordable price in 2014, and what the ACA means to their business and to their bottom line. It may seem like a lot to accomplish in a little over a month. But don't panic! Here are four tips to help small businesses prepare for 2014.
1. Identify Your Health Insurance Goals
Health reform is top-of-mind for many small business owners, however don't let it overshadow why or how you want to offer health insurance coverage. What are your health benefits goals? What do you hope to get out of offering health benefits to employees? What is your budget? Most small businesses have goals such as affordability, reducing administrative time, retaining key employees, improving productivity, and having an attractive benefits package to offer prospective employees.
Understanding these goals for health benefits will help you identify the right solution for your small business. When you lay out your benefits and budget you may find a traditional approach isn't right for your small business. Or you may find it is. Either way, the good news is that if you are a small business with fewer than 50 employees you are not subject to the 'employer mandate' in 2015 (offer traditional insurance coverage or be subject to penalties).
2. Consider Non-Traditional Health Insurance Options
Many small businesses have been priced out of a traditional small group health insurance plan. Or, they identify their health benefits goals and realize a traditional route does not match up. Because of these reasons, and because of the new advantages with individual health insurance in 2014, small businesses are adopting "pure" defined contribution health benefits. With a "pure" defined contribution health benefits approach, you set your budget (any amount) and provide healthcare allowances to employees to use to purchase their own individual health insurance. Besides the cost controls defined contribution creates for your small business, it allows employees to customize their coverage, pick their doctors, and customize their health benefits.
Read more about defined contribution and cost-controls here.
3. Communicate with Employees
A recent survey found that 44% of employees worry their employer may reduce health benefits. This fear and uncertainty comes from change brought on by the ACA and a general lack of understanding about the ACA and health insurance. To help ease employees' concerns and increase their knowledge, communicate with employees now, and on an on-going basis, about how the ACA is impacting health benefits and what they personally need to know about the ACA.
Stumped? Here are five ways to communicate your health reform strategy to employees.
4. Understand New ACA Requirements for 2014
Lastly, as 2014 quickly approaches are all of your I's dotted and T's crossed? Make sure you understand your requirements as a small business under ACA. There are several health reform checklists available online to help (like this one).
What are you doing to get ready for 2014? Leave a comment.
