Major Medical Insurance
PPACA Compliant Plan for Groups & Businesses
For below 65
Employer Sponsored Patient Protection Affordable Care Act compliant plans for Groups & Businesses
Under PPACA, the electronic online platform called Marketplace facilities the ‘Employers’ of businesses to either offer and administratively control health insurance matters of its ‘Employees’ by sharing premium costs of health plans(s), including or excluding their dependent. There are two distinct categories of employers: Small Businesses, and Applicable Large Employers. It is just because the rules of procedure and provisions are complicated due to qualifiers for ‘individual and family’ plans, a large segment of employer sponsored has not due attention
Things to know before I sign up for it
What’s birds eye view on ACA numbers?
It is reported that in 2017, the enrollment of non-group [individual and families] averaged 7% of total population, whereas enrollment for employer-sponsored plans touched 49% of total population. The Medicaid showed 21%, Medicare showed 14%, and the uninsured showed 9%, and 1% goes to ‘other public’ segment enrollment of the total population. Even out of 7% of individual and families segment, ACA subsidizes about 4%. This makes about 35% help seeking population on welfare system. The net effect of this scenario is that healthcare costs and premiums are on rise.
Why use SHOP (Small Business Health Options Program)?
The Small Business Health Options Program (SHOP) is for small employers who want to provide health and/or dental insurance to their employees. Here are some features of this program:
- Insurance carriers place their competitive health plans on the Marketplace for you, the employer, to select a plan for your employees, or let your employees choose a plan for themselves.
- You set your policy of offering a selected health plan or a set of plans to choose from for your employees for enrollment, with or without their dependents, and your offer of sharing of premium costs.
- You have administrative control on the enrollment of your employees to health plan(s) during open enrollment and off-the-open-enrollment
- If you have business in more than one state, you can either offer enrollment for one selected plan with a multi-state carrier, or else you may open account in Marketplace for each state and let your employees choose the plan.
- You may do all the enrollment and disenrollment work for your employees yourself, or you engage services of your State licensed and certified Federally Facilitated Marketplace SHOP broker to do all the administrative work for you free of cost to you since carriers pay to broker on commission basis. A broker can advise on how best to evolve your policy regarding health insurance for your employees in the best interest of your business.
- You [the employer] decide on a percentage to contribute towards the health insurance premiums of your qualified employees, and their dependents if applicable. The category of plan or plan(s) that you [the employer] select for your employees affects how much your enrollee employees will pay for deductibles, copayments, and out-of-pocket expenses for the year when heavy medical expenses strike. You [the employer] may even select a reference plan to share premium costs and your employees pick up the rest. Depending upon how you want to give premium-sharing benefits to your employees, you can estimate your expenses from guidelines here.
- You [the employer] and your qualified employees may experience less financial uncertainty related to premium cost increases at plan renewal.
- For your [the employer] new employee and qualifying event(s) affecting your currently enrolled employee in FF-SHOP plan, Special Enrollment Period is available for 30 days from the triggered qualifying event. These qualifying events are the same as for Individual & Family plans.
Qualifiers for Small Business Health Options Program [SHOP] Small Employer having fewer than 50 employees
- You, the employer, qualify for Small (Business) Employer if you have 50 or fewer full-time equivalent employees. Some states may be expanding SHOP to allow businesses up to 100 designated as ‘Small Employer’ or may use different employee maximums. An employee is who is on payroll and gets W-2 at the end of the year. It is important to note that your [the employer] employee has minimum essential health coverage through you [the employer], or obtains through other channels if your employee declines to accept health insurance from you [the employer]. It is mandatory under the law that you, [the employer] maintain a policy and its documentation regarding minimum essential health insurance coverage to your employees.
- Note the clear difference in definition of Small and Large Business by the IRS. There is big taxation and reporting difference between Small and Large Employers.
- You can offer SHOP coverage to your employees any time of the year.
- If you are self-employed, run your own business and have employees who are self-employed as well, you are not qualified for group coverage. You can purchase qualified health coverage as for individuals and families during open enrollment.
- Full Time Equivalent number of employees (FTEs) is = the (number of employees who work average of 30 hours or more for more than 120 days in year, or number of employees you [the employer] expect to work these hours) + (sum of hours worked by part-time employees who typically work less than 30 hours per week / 30 ).
- It is optional for you [the employer] to offer health coverage to your part-time employees.
- You as an employer must offer health insurance to your employees. For you to be qualified for FF-SHOP Marketplace, there must be a minimum employee-participation of around 70% [in most states] of full-time employees who must accept your [the employer] offer of health insurance coverage through FF-SHOP marketplace during the year except for duration of Open Enrollment season form November 01 to December 15 .
- Call SHOP Call Center at 1-800-706-7893 to check minimum employee-participation rate in your state.
- Non-participating employees in your offer for health coverage must show that they have health coverage through some other plan when they decline your offer.
- You may resolve your [the employer] predicament of either getting your employees’ required participation rate anytime during the year, or you wait for critical open enrollment during November 1st to December 15th, when no such restriction applies.
- It is optional for you, the Small Employer to offer health insurance to your employees, and for your employees to accept or not and be on their own to purchase health insurance.
To qualify for the tax credit, all of the following must apply:
- You have fewer than 25 Full Time Equivalent [FTEs] employees, and average annual salary of an employee is about $50,000 or less.
- You get higher tax credit if you have fewer than 10 employees who are paid an average of $25,000 or less. Smaller the business, bigger the tax credit.
- You pay at least 50% of your full-time employees’ premium.
- You offer coverage to your full-time employees through the SHOP Marketplace.
- It is optional for you to offer health care coverage to your part-time employees (working less than 30 hours per week).
Qualifiers for Applicable Large Employers, (or ALEs) having more than 50 employees
You must find out how in your state you are designated as Small or Large Employer by calling SHOP Call Center at 1-800-706-7893 so you know the tax treatment you will get from IRS. Generally, if you have more than 50 employees, you are designated as Applicable Large Employer.
It is mandatory that you (the employer) offer minimum essential health care coverage to your employees. If you do not offer adequate affordable coverage to your full time employees, and one or more of those employees get a Premium Tax Credit, you will be paying penalty for letting that happen. Note the keywords for health care coverage are ’’adequate affordable coverage to your full time employees, and their dependents are implied within, and that the affordable coverage provides minimum value “; or else, you as Large Employer shall be liable to IRS for penalties, euphemistically termed as ‘shared responsibility’. It is also referred to as ‘’the employer mandate’’ or ‘’the pay or play provision’’. There are flavors of these payment shocks depending upon how you [the employer] are organized. It is best for you as employer to have your staff well versed and trained to turn the health care benefit you provide into a great incentive for your employees.
In addition to maintaining health coverage for your employees, you as the Large Employer also have ‘information reporting responsibilities’ regarding minimum essential coverage offered to your employees.
How to Plan Your Major Medical Health Insurance?
With a variety of health insurance plans available, individual and family, and through your small or large employer, you may consider a number of factors to make choice for a plan suitable to you and your family needs. Here are some factors to consider while making that choice to cover your routine medical needs, and your risk coverage if sudden high expenses strike:
- If you and your family are in income level less than four times the Federal Poverty Level, check the premium subsidy available and your choice to purchase plan.
- For purchasing health coverage through small business employer, check what choices you have for the plans and what contribution the employer will make for you and your family. You share premiums only with your employer irrespective of your income level.
- Check if your employer offers insurance for your dependents. Ensure that your dependents are covered.
- Check if you prefer to open a Health Savings Account and combine it with the HSA compliant health insurance plan that you would like to purchase to reduce premiums, and how will that work out considering the taxes you save.
What is alternative for an employer, or employees?
You as an employer have the option to offer medical insurance or not to offer to your employees. If you are just too small a business and it is burdensome to get into ACA major medical plans for your employees, think of affordable Short Term Medical Plans available in combination with supplementary insurance and ancillary medical plans, which are available to sign up any time of the year. As an employer, you may consider to underwrite premiums for your employees, self-employed or regular employees.
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