When you own a small business, it may sometimes feel that the odds are stacked against you in favor of big corporations. This is certainly true when it comes to providing health insurance for employees. Large employers pay an average net premium of $4,516 for individual coverage for a single employee, while small business pay a net average of $4,548 for the same individual coverage. While large companies are required by law to provide health insurance coverage for their employees, they also have more tools with which to do so in the form of buying power and an advantageous negotiating position.
However, while it has often been criticized as being harmful or burdensome to small businesses, the ACA actually provides provisions for small business owners to provide their workers with some measure of health coverage without breaking the bank.
Small Businesses Health Insurance Helps You and Your Employees
You may be relieved to know that you are not required to provide your employees with health insurance if your company employs fewer than 50 workers. However, even the smallest of small businesses stands to gain from providing health insurance if at all financially feasible. When it comes to employee benefits, health insurance is the number-one priority of job seekers. With unemployment numbers currently at a record low, potential employees can afford to be choosy, and if you do not provide the health insurance they require, they will go work for somebody who does.
Furthermore, providing health benefits helps to provide you with a fit and stable workforce. Employees with health insurance are able to see a doctor promptly and take advantage of preventative care so that small health issues have less chance of developing into long-term debilitating conditions. Investing in the health of your workers potentially stands to pay dividends in the form of increased long-term productivity.
SHOP Program Helps Small Businesses Cover Their Employees
Despite the talking points that you may have heard from certain politicians, the goal of the Affordable Care Act is to help as many people as possible obtain health insurance coverage. The legislators who wrote the law understand that small businesses sometimes have difficulty affording health insurance for employees, and that's why they created the Small Business Health Options Program (SHOP) to help make health and dental benefits more affordable for small businesses to offer to full-time equivalent employees.
In order to enroll in SHOP, your company must meet the following requirements:
- SHOP coverage offered to all full-time equivalent employees
- At least 50 percent of employees' premiums paid
- Fewer than 25 full-time equivalent workers employed at the company
- An average annual salary of $50,000 or less paid to full-time equivalent employees
The Small Business Health Care Tax Credit, which can lower premium costs, is only available to small businesses who enroll in SHOP. It is important to note that only employees are eligible for SHOP benefits.
The cost of providing health insurance to employees can seem prohibitively expensive, but it doesn't have to be, and doing so is beneficial not only to your employees but to the health and longevity of your business. For more information on how Sackett & Associates can help you insure your employees, call us at 707-823-3689. Like us on Facebook, find us on LinkedIn, and subscribe to our blog for more ideas about how you can save money on insurance.