Health insurance pools can be difficult waters to navigate even for an individual concerned only with their individual needs, but those difficulties are often multiplied when dealing with employer health insurance on an institutional scale.
Because of the multifaceted layers of complexity contained within the commercial healthcare market, the best advice for anyone attempting to secure new commercial coverage or to make updates to their organization’s existing policy, is simply to contact a health insurance broker to serve as a guide and advisor through the employer health insurance acquisition process.
That said, not all brokers are equally suited to your organization’s specific considerations, so it’s typically best to use the available technology to refine your broker search by area, rating, and specialty, as well as becoming generally familiar with your organization's needs and legal requirements in advance in order to better facilitate the process.
The first question most purchasers of employer health insurance want to ask is whether or not they are legally required to provide health insurance to their employees in the first place. The answer to this question will largely be determined by whether or not your organization qualifies as a small employer or a large employer in accordance with the operative federal regulations. This of course begs the question, how large does an employer have to become before they cross the threshold from small to large qualification?
The simplest answer is that there’s no simple answer. The general cut off is 25 full-time employees or fewer to be exempt from federal coverage requirements. However, there are thresholds for the qualifying number of full-time employees at 50 and 100 with significant implications for the withholding, reporting, and coverage requirements, as well as the coverage plan options available at those levels.
Even this oversimplified answer raises an additional question of what constitutes a full-time employee (typically 30 hours per week), which in turn raises further questions about how those hours are calculated and over what period of time (e.g. based on the average of the previous year in general).
In short, the complexity of the matters involved makes it highly advisable for those who are inexperienced in the space to seek outside guidance in order to become better informed about the options and obstacles specific to the unique needs of their organization.
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So, what happens if your organization crosses the threshold that mandates employer health insurance coverage, but your organization’s health insurance provisions (or lack thereof) fail to meet the federal requirements?
First, crossing the threshold doesn’t necessarily mean your organization is immediately in violation (see complexities above), though it may require the employer health insurance coverage package or benefits be increased in the future in order to meet increased regulatory standards of the higher employee tier.
Continued violation, on the other hand, whether willful or not, will result in fines imposed by the IRS for failure to provide employer health care coverage in accordance with an employer of your organization’s size. In such cases, fines will be determined based on information specific to your organization, so outside guidance from an advisor, employee benefits consultant, or licensed broker is again recommended prior to incurring such penalties.
In addition to fines, qualifying large employers (ALEs) who fail to meet the minimum federal regulatory requirements miss the crucial opportunity to utilize the advantage that comprehensive and sometimes creative or uniquely tailored benefits packages can provide to an organization in the current highly competitive talent retention environment.
In order to obtain those very advantages, in fact, many smaller employers who are exempt or qualify for limited regulatory oversight and looser coverage standards are choosing to opt in for additional coverage benefits that can act as an effective talent retention and recruitment tool and help the organization stand out in a crowded industry.
This strategy can be particularly effective in recruitment as it sets an immediate tone with prospective hires that the company prioritizes the needs and well-being of its employees.
Similarly, uniquely tailored benefits packages can be extremely effective at retaining talent and rewarding longevity and loyalty by acknowledging the reality of the costs that accumulate over the period of time it takes for employees to earn experience. This helps employers display that loyalty in return.
With all of the many considerations that must be taken into account when complying with federal employer health insurance standards, it is important to evaluate not just the size and structure of your organization in relation to regulatory guidelines, but also to consider any needs that may be specific or unique to your company or industry.
In light of those specifics, consider how your benefits package could be arranged to best fulfill those needs – both from a recruitment and retention perspective as well as from the standpoint of optimized business productivity via happy and healthy employees.
With the vast variety of benefits options and brokers available combined with the current technological search capabilities to instantly find the best fit for your organization, there is no excuse not to make sure your current employer health insurance benefits and incentive options are not only in compliance with federal law, but are maximizing the value of those expenditures to benefit not only the employees, but also the organization as a whole.Find Top-Rated Insurance Brokers Near You
At Mployer Advisor, our focus is creating transparency in the insurance and insurance broker, consultant and advisor space to the advantage of the employer. Analytics is our core and we will bring to light new information, tools and resources to aid employers in making more cost-effective decisions. As a phase I, we are here to help employers find the right broker or consultant and the right insurance company for them. Giving choice and initial transparency is a first step in creating an employer centric insurance marketplace.
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