4 Paths a Small Business With Group Benefits Should Consider in 2014

4 Paths FO a small business with group benefits should consider in 2014 All 4 are compliant with the Affordable Care Act There are several provisions of the Affordable Care Act (ACA) that will affect small businesses in 2014 and 2015. Employers who currently sponsor group benefits plans may take one of four paths to maintain employees' health in 2014. All four paths are compliant with the ACA; however, the decision to either continue to offer or drop group benefits is one each employer must seriously consider. coverage *A small business is defined by the ACA as one that employs 50 or fewer full-time equivalent employees. Remain a Group 1 Enroll or renew with a carrier Effective January 1, 2014, all carriers will be ACA compliant by incorporating essential health benefits into their 2014 plans. Take note that in 2014, some carriers will base their small group plan rating on employee and dependents' ages and geographic location. O Employer Advantages • Reduced payroll taxes; the amount used to pay for health coverage are not subject to these taxes. Your Benefits Plan • Valuable recruiting / retention / employee satisfaction tool. O Employer Disadvantages • Cost of providing coverage. • Potential cost increases trom year to year. • Administration of the employee health plan. 2 Remain a Group Enroll in a plan through the SHOP Small employers are now able to enroll their employees in coverage with the Small Business Health Options Program, or the SHOP. This is the only way to obtain the Small Business Health Care Tax Credit in 2014 & 2015. O Employer Advantages Only option if company is eligible to receive Small Business Health Care Tax Credit Welcome to the SHOP Marketplace (up to 50% of premiums paid). Eligible small businesses can still claim a business expense deduction for the premiums in excess of the credit. How the SHOP Marketplace works Employer Disadvantages Cost of providing coverage. Administration of the employee health plan. Limited plan choice. 3 Move Individual Employer will offer some compensation Per the standards of the ACA, the IRS will not penalize small employers who choose not to provide group benefits for their employees. There are multiple options for employers to compensate employees for health-related costs that do not involve provision of benefits - these may include, for example, an employer paid premium for an individual health plan or a salary increase to purchase individual health plans. O Employer Advantages Contribution can be a set amount each year. Not dependent on health care costs. Satisfactory recruiting/retention/employee satisfaction tool. • No administration of benefits necessary. O Employer Disadvantages •Incurring cost of increased employee compensation. • Increased payroll taxes; the amounts paid as compensation are subject to taxation. Move Individual 4 Employer encourages use of Health Insurance Marketplace Because the ACA will not penalize small employers, some may choose to drop group benefits entirely. If you choose to drop your group benefits plan entirely, encouraging your employees to use the individual Health Insurance Marketplace is incredibly important to ensure the maintenance of their health and to avoid a tax penalty. Employer Advantages No direct financial cost. • No administration of benefits necessary. Employees may be eligible for a subsidy through the Health Insurance Marketplace. HedthCare y Leam ucc Irsurance Logla ELOO VE 13 THE VwKnrLA adi grainE. yarREund 1utyl Enroll by March 15 for coverage starting April 1 Open evl mem rtarh APPLY NOW USE YOUR SEE PLANS ,ץא בו ירהה + OEmployer Disadvantages Potentially high turnover costs and inferior workforce due to the loss of a key recruiting and retention tool. • Potential negative impact on employee morale / commitment. We can help you discover the path that's right for your business. THE BAILEY GROUP Sources: irs.gov healthcare.gov sba.gov/healthcare INSURAN CE • BEN EFITS • FINANCIAL STRATEOIES www.mbaileygr oup.com This infographic is not intended to be exhaustive norshould any discussion or opinions be construed as le gal advice. Readers should contact le gal counsel for legal advice