If you are an employer planning to offer group health benefits for your employees going into 2021, the time to act is NOW.
The Open Enrollment period for 2021 employee benefits begins Sunday, November 1, and ends on Tuesday, December 15, 2020. If you are looking to offer health coverage as part of your employee benefits for the first time, or simply renewing your 2021 health benefits plan, now is the time to start planning.
Small Business Health Options Program
Deciding on a 2021 health benefits plan as part of your employee benefits, whether it’s for the first time or simply preparing for another year, can be challenging. While the upside is that you have several options, that, too, can be complicated.
Essentially, as a small business owner, you have the choice of purchasing small group coverage either directly or through a broker like J.C. Lewis Insurance, or through the federal insurance exchange. The latter option, the Small Business Health Options Program, or SHOP, was created by the Patient Protection and Affordable Care Act.
SHOP was created for small employers who want to offer health and dental insurance to their employees that is affordable, flexible, and convenient.
To purchase SHOP insurance, your business must qualify for small business tax credits and must have 1 to 24 employees in California. One advantage is that, if eligible, you don’t have to wait for the Open Enrollment period, which means you can start offering SHOP coverage to your employees any time of year.
Does your business qualify for SHOP?
- Employ fewer than 25 full-time equivalent employees
- Pay employees an average annual wage of less than $50,000 per year
- Pay at least 50 percent of employee premiums
- A minimum of 70 percent of all eligible employees must enroll in the health plan unless they are insured through their spouse’s employer-based coverage.
Employers must purchase small group coverage through the SHOP at Covered California to be eligible for tax credits. You can use the Small Business Tax Credit Calculator to check your eligibility for this program.
If you decide to enroll in SHOP coverage, you can either contact your insurance company and enroll directly through them, or call J.C. Lewis Insurance, a SHOP-registered broker.
Considering the Group Health Insurance Option
Another option for providing your employees with an affordable and comprehensive group health benefits offering is to purchase a 2021 health benefits plan outside of the exchange.
There are a few things to keep in mind when opting for group health employee benefits.
As an employer, you are required to pay a portion of your employee’s premiums, but it is possible to obtain contribution options as low as 50 percent. Other possible options include choosing between a percentage contribution or a fixed dollar amount as low as $100 monthly per employee.
And, keep in mind, that your employer contributions can be 100 percent tax-deductible on your state and federal income taxes.
Depending on the carrier and the plan, at least 65-75 percent of your eligible full-time employees must participate in the program. Any employees who are considered what is called “eligible waivers,” (which are employees with Medicare, military benefits, or covered under a spouse’s group plan) are not included in the percentage of employee participation.
In addition, there must be a minimum of one W-2 employee who is not a spouse of the owner or partner.
Why Consider Offering 2021 Employee Health Coverage Benefits?
Offering California group health insurance is a great way to keep and reward your valued employees by providing medical protection for them and their families.
There are numerous reasons why offering health insurance options to employees is beneficial. Here are a few key reasons provided by HealthCoverageGuide.org.
“Businesses that offer group medical coverage report there are several advantages to doing so. Having group medical coverage may:
Lower your hiring costs.
Looking for, hiring, and training new employees takes time and costs money. Having insurance helps you to recruit and retain talented employees.
Reduce absenteeism and decrease risks associated with poor health in the long run.
When employees don’t have health insurance, they wait longer to seek treatment, which can lead to the need to stay home from work or go out on disability. Healthy employees are less likely to injure themselves and more likely to do their jobs well.
Enhance your office atmosphere and improve morale.
Employees tend to be happier and more satisfied with their jobs when they are offered group insurance. Some small employers indicate that their employees will accept slightly lower wages if those wages come with health insurance. In addition, employees can benefit tax-wise and convenience-wise by paying premiums right from their paychecks.”
Your Best Local Health Benefits Planning Partners
J.C. Lewis Insurance is made up of expert brokers and is a long-time, family-owned firm based in Sonoma County. We offer California small business health insurance plans only from leading health insurance carriers that are licensed to do business in California.
Along with being experienced, professional, and local brokers, we are licensed and certified by each of these insurance carriers to offer coverage to individuals, families, and small group employers in addition to Medicare supplemental and prescription drug plans for seniors.
When you’re shopping for medical insurance plan options for your employees, or for you and your family, you are likely to have several questions and concerns. We invite you to bring us your questions about health coverage insurance and want you to know that J.C. Lewis Insurance Services will help you find the right solution.