A hot topic on the minds of most business owners today is how to be compliant with the Affordable Care Act (ACA) and, more specifically, minimum essential coverage.
Large companies (categorized by having 50 full-time employees or more) are now required by law to offer a group health insurance plan that meets the minimum standards. This is what is referred to as minimum essential coverage.
There are a number of companies that fall into the category of "large employer" because they have 50 or more employees, but they don't have the budget to offer a group health insurance plan. As a result, these employers are faced with making the decision to offer a costly benefit plan or pay hefty fines for failure to offer minimum essential coverage.
- Offer a group health insurance plan for full-time employees and their dependents via a governmental plan, a plan in a small or large group market within a state, or a grandfathered health plan within a group market
- Offer a self-insured group health plan
- COBRA coverage
- Retiree coverage
- Offer coverage via an expatriate health plan
If you fall into the category of having 50 or more full-time employees, you are faced with the decision as to how you will handle the minimum essential coverage requirement. Here are 4 ways that your decision can impact your bottom line:
Option 1: Offer the minimum essential coverage required by law, therefore preventing you from paying any penalties.
Option 2: Offer a minimum health insurance plan to employees with the understanding that it would offer very limited coverage to employees or would not be very affordable. Since you are offering all of your full-time employees the option for coverage, you could avoid paying some penalties. However, you'll likely end up paying penalties due to employees opting to get fuller coverage from the Exchange.
Option 3: Don't offer minimum essential coverage and pay a fee of $2,160 per employee (for 2016). Additional penalties may be required assessed as well.
Option 4: Consider self-insuring your health plan, which can be a more affordable solution.
As you well know, the ACA and minimum essential coverage requirements can be challenging to navigate, especially considering that the requirements are constantly changing. Failure to comply to these regulations can be very costly to your business.
Fortunately, our experienced team at Summerlin-Roberts has your back. We can offer your company some unique solutions to help you comply with minimum essential coverage without you having to pay an arm and a leg. Please contact us to learn more about how we can help you choose the best way to handle compliance with the ACA and minimum essential coverage.