Health Care - Should You Offer It to Your Employees?

Health care benefits are optional for a majority of small businesses, but of extreme importance to most employees. Employers of any size need to be aware of the upside and downside of providing health coverage to their employees. Our world may always be changing, but one thing is for sure, for employees, benefits are a significant part of an employee compensation package.

Matter of fact, health-care benefits may even be considered the deciding factor when hiring the most qualified individual for your company. Because attracting and retaining the best employees can be a competitive undertaking, offering health-insurance benefits might just give you the edge in the acquisition for the best talent.

What other advantages are there for employers to offer health-care benefits?

Avoid penalties imposed by health care reform.
The Patient Protection and Affordable Care Act and related legislation requires employers with 50 or more full-time employees (or a combination of full-time and part-time employees that is equivalent to 50 full-time employees) to offer acceptable health-insurance coverage or be subject to taxation if their employees receive premium tax credits to buy their own insurance. This mandate is in effect beginning in 2015.
Gain tax advantages - You can offer employees something that incentivizes their compensation package and also permits you an income tax deduction for the contribution, so that your out-of-pocket spending is less than the value of the benefit to the employee.
Self-employed individuals can deduct 100 percent of their health insurance premium costs as a business expense.
Another motivation many employers elect to offer health care benefits is so that they may also take advantage of less costly health insurance than they could get on their own in addition to the tax breaks for the contributions made by the business.

POINT OF INTEREST FOR EMPLOYERS.

You can offer your emplyees purchasing power with group rates. Even if you decide not to contribute anything toward your employees' health insurance, you can offer them the opportunity to obtain group rates through your company. Furthermore, small businesses (generally, those with 50 or fewer full-time employees) may purchase health-insurance coverage through a government-run insurance marketplace established specially for them. It is called the Small Business Health Options Program (SHOP).

Take advantage of the small business health care tax credit.

Small businesses with fewer than 25 employees may be eligible for a tax credit for purchasing health insurance for their employees.
If you employ fewer than 25 full-time equivalent employees and pay at least half of the premiums for single health insurance coverage for their employees are eligible to claim a tax credit. This credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ moderate- and lower-income workers.
Beginning in 2014, this credit is only available if you pay premiums for employees who enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP). You can no longer claim the credit for insurance provided outside of this program.

The small business health care tax credit is designed to be an incentive to both small businesses and small tax-exempt organizations in offering health-care coverage to their employees for the very first time or keep the coverage they already have in place.

Claiming this credit can result in a substantial tax savings. For example, if you paid $80,000 in health care premiums for your employees, and you meet all the requirements for the full amount of the credit, then you could claim a credit for $40,000 (50% x $80,000).

Even more advantages to providing health-coverage assistance.

Health insurance costs paid for an employee are a deductible business expense. Of course, a tax credit might be superior than a deduction because a credit cuts your tax accrued dollar-for-dollar, while the amount of a deduction is attached to your minimal tax bracket.
In order to increase your greatest tax savings, you should claim as much as a tax credit as you possibly can, and then deduct the remaining premiums.
Ensure the wellness of your workers. Insurance plans offering preventative care that help to keep employees healthy and working.

There are not so favorable reasons to offering health-care benefits.

Disadvantages of offering insurance benefits

There are a number of not so favorable reasons to offering health benefits to your workers. Here are some of the major ones:

The expense - Health care costs have risen substantially in recent years. As a result, not only are the costs exhausting vital resources from many small employers, the uncertainty makes financial planning especially cumbersome.
With that caveat, there is a way for a small employer to control these expenses.... pass on any additional expenses on to employees. Of course, in some cases, this can produce its own host of problems.
The administrative stresses - Even though the insurance company from whom you purchase the health insurance will usually act as plan administrator, you will have to choose the insurer and then spend part of your time filling out forms, remitting premiums and acting as the go between from employee and insurer.
The possible legal responsibility. The potential for liability for selecting a health-care provider that commits malpractice on an employee does, even if slim, exist. Still, don't let this be the reason for making the decision not to offer health insurance.

If you do make the decision to offer health insurance benefits, be aware that you call into play a whole series of laws that will tell you what coverage you have to offer and how you have to offer it. Therefore, the first decision to make is to contact an insurance agency that partners with you.

The advantages of using Integrated Insurance Agency

We partner with you
We know the ins and outs of the health care system so you do not have to…just ask us your questions.
We are students who are constantly learning and keeping abreast of the laws and requirements to give you piece of mind in implementing benefits to your employees.
Integrated Insurance Agency reviews your premium amounts multiple times a year to protect profit margins.
Integrated Insurance Agency customer service calls its clients at least twice a year to stay on top of current information.
Integrated Insurance Agency associates personally meet with their clients twice a year to talk about insurance carrier positions for the future.
Getting quotes from different carriers twice a year helps keep peace of mind that you are not over paying on your insurance.

You can be assuresd that your business and personal insurance policies are not costing you more than they need to. Protection is vital and so is healthy profit margins. Don’t let insurance premiums steal away your profits. Call Integrated Insurance Agency at 888-823-1342.

Associate focus of the Month

Troy Piper – “The Go to Guy”

www.piper@myiiagent.com

Troy Piper is a long time resident of St. Clair County and has been in the auto industry for over 10 years. Though Troy specializes in the Property and Casualty aspect of insurance, he has an affinity for helping people with getting all their insurance needs handled.

As the 'Go to guy,' Troy personally makes sure his clients are well taken care of in every aspect of insurance.

REMINDER – Integrated Insurance Agency associates are always striving to provide the best service at the lowest rate. If you are not using Integrated Insurance, you’re paying too much for insurance!

We look forward to being your partner for insurance wherever you are. We are pursuing expansion to other convenient locations:

Brighton, Michigan

Novi, Michigan

St. Clair Shores, Michigan

Port Huron, Michigan

We are continuing to grow throughout the U.S. including: Nevada, Texas, Kentucky, Ohio and Indiana. with even more locations to come.