Sayhealthy.net – Should we play or offer? an employer with over 50 employees are trying to figure out how to deal with the Affordable Care Act’s” employer mandatory” which requires applicable big employer either furnish health insurance or else offer an excise disadvantage. The employer mandatory disadvantage goes into the outcome in 2015 for the employer with 100+ employee and goes into the outcome in 2016 for the employer with the 50-99 employee.
But what employers should be asking is: how can I take advantage of the Affordable Care Act( ACA) individual insurance premium excise aids and actually save money on health care payments?
Play or Pay Defined
First, what does daily or pay mean? Play or offer is a concept that requires employers with over 50 FTE employees to provide health insurance to their employees (” dally “) or offer a tax or premium toward a publicly funded structure that considers people without private insurance (” fee “). The ACA play or offer requirement is also referred to as the “employer mandate” or” employer common responsibility .”
The Play or Pay Decision… and how to Dally Differently
Many employers are asking should we performance, settle, or play differently with a defined contribution scheme? The decision is not always easy or straightforward. Ultimately, employer wants to provide a health welfare that is valuable to employees( i.e. recruitment and retention ), and has value to the employer( i.e. best available benefit for the cost ). The three selects an employer for the employer with over 50 employers are to play, settle or play differently with defined contribution.
To play means your company would offer employees health insurance that meets essential health benefits and is affordable to employees, by ACA standards.
- To pay means your company would choose to not offer health insurance and instead pay a tax penalty. (Tip: many companies who plan on paying, simply think of the tax penalty as a contribution to their employee’s health benefits)
- To play differently is the middle ground between play and pay. It means your company chooses not to offer a group health insurance plan, pays any applicable penalties, and instead offers employees a health benefits allowance (called “Pure Defined Contribution”). Employees purchase policies from an insurance agent, online, or through the new health insurance marketplaces. Then, the company reimburses employees for their policies tax-free up to the amount of their allowance.
Why Would an Employer Play Differently?
An employer would consider playing differently because it will likely:
- Save employees and employers a combined 50% on health insurance costs.
- Allow employees a full choice of health insurance plans.
- Provide employees with better, more flexible health insurance options.
With the brand-new Individual Health Insurance Marketplaces( guaranteed-issue and economical because of the insurance premium excise aids ), defined contribution plans now have all the same benefits of a group health insurance strategy at lower costs for the employer and employees.
Defined Contribution & Employee Health Insurance Cost Analysis
To decide whether to play, fee or play differently with a characterised contribution propose, “the employees ” with over 50 employees should conduct a simple expenditure analysis. Compare the cost of the three alternatives:
- Qualified, inexpensive group health insurance
- Defined Contribution Plan+ applicable retributions
Less Than 50 Employees? No Play or Pay Decision
If your corporation has less than 50 employees, the mandate and imposition disadvantage( and thus the comedy or pat decision) does not apply to you. With the new health insurance marketplaces and insurance imposition aids, countless small employers will:
- Drop their group health insurance plan( if they have one ).
- Allow employees to purchase plans through their regime health insurance exchange and be able to take advantage of individual tariff subsidies.
- Reimburse employee for their premiums( or a portion of their premiums) through the characterised contribution plan( a stand-alone Health Reimbursement Arrangement ).
This article originally appeared on zanebenefits.com