How Should A Growing Company Prepare For The ACA?
If you currently run a business with under 50 employees you shouldn’t let your apprehension and unanswered questions about the Affordable Care Act, keep it from growing. Understanding how you can prepare for the Affordable Care Act and its potential affects on your company will make all the difference to both you and your employees.
Avoid Changing Your Hiring Plans Because Of Uncertainties About the ACA
To put it simply, keep on keepin’ on. There’s no reason for you to stop your company from growing because you think the ACA will cause your healthcare costs to surge. In some cases, being a larger business might actually be a good thing.
Yes, some large companies’ finances may grow thanks to the pay or play rule, but most large business already offer coverage that meets ACA requirements, eliminating hidden costs. Worst case scenario, your health care costs increase between 5 to 10 percent.
Self-Funding Might Be the Best Avenue For You
In the case of a fully-insured health insurance plan, employers pay premiums to their insurance carriers covering the cost of claims filed by employees. However, with a self-funded plan, the employer pays for employees’ healthcare claims taking over the coverage previously held by a carrier.
The employer can choose what coverage to provide employees as well as however high they want to set premiums, deductibles and copays. A chosen plan can be administered by the employers or they can easily go through Third Party Administrator (TPA) or an insurance carrier.
There’s no doubt this direction is a big risk. You may be wondering what makes it worthwhile for you to go this route, and the answer is simple. If you have young, healthy, employees, you might decide your total claims would actually be less than the premiums resulting from being lumped into community rating.
Essentially, if you go this path, you are betting that you don’t need the insurance. Under this type of plan, employers base the amount of expected claims on their employee claims history and utilization. Self-funded plans result in a 2 percent annual tax savings because they are exempt from state premium taxes.
Consider Adding Health Requirements to Your Wellness Plan
While it may seem harsh at first to some employees (especially ones with habits that are not good for them), a health-contingent wellness plan can be very successful. It works by simply requiring employees to meet certain expectations to receive their incentives.
For example, getting a flu shot, going to the gym, quitting smoking, drinking less alcohol are all ways to develop a goal-oriented wellness plan which should ultimately make for healthier employees. After all, the healthier your employees are, the less likely they are to file claims which will keep insurance costs down. It is a win-win for everyone.
Create a New Budget Which Reflects Increased Costs
Knowing you will experience increased costs, take a look at your options for health care coverage and estimate the financial increase on your company. Doing so will help you set aside enough for the adjustment and help you keep your budget intact.
As a business owner of a growing company, preparing for the ACA changes might seem a bit overwhelming. As if running a successful business and keeping clients happy wasn’t enough to have on your mind, right? But, rest assured, the adjustment can be simple if you consider the above options and do what makes the most sense for your employees and your budget.
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