Navigating Health Insurance in 2018 for Small Business Owners
Medical insurance continues to be challenging for small business owners; carriers are leaving the individual market in many states, forcing some of our clients to look at group insurance as an option. While there are tax credits available for offices who qualify to help defray the cost, it is an additional staff cost and can be a compliance headache unless you have a knowledgeable agent. Health insurance is state-specific, so I generally refer clients to a local independent agent for help navigating the constantly-changing market.
Susan Reed, a Benefits Consultant at Hallier Reed Employer Benefits provided the following background on how group insurance works:
With the recent exodus of Blue Cross from the individual market, small business owners have been asking how they will get health insurance in 2018. Most business owners, even those in the smallest of business, may find themselves looking at group insurance.
The definition of “small group” for health insurance purposes usually means groups with 50 or fewer employees. As a small employer offering health insurance, the rates your receive from the insurance carrier are the rates you will pay; due to the ACA (Affordable Care Act), rates are based on age and geographical location. The insurance contract usually requires the company to pay a percentage of the employees’ premium. In my practice, the employer will pay from 50% to 100 % of the monthly rate. The employer is not required to pay for dependent coverage, however, it can be offered with the employee paying the premium for spouse or family. As an employer with a group insurance plan you will need to offer the plan to all full time employees. When the employee leaves the company, the employer will need to offer either COBRA or State Continuation of the plan.
For very small companies in Kansas and Missouri, Susan has the following information:
Blue Cross will be offering group plans for husband/wife companies with state specific requirements. Hopefully, the information below will help business owners with a strategy for 2018.
- BCBSKC Individual Plans – If you were enrolled in your plan before October 1, 2013 your plan is grandfathered and you will not need to make any changes.
- In Kansas (Johnson & Wyandotte County) - BCBSKC will offer group coverage to a husband & wife company provided there is salary documentation for each person.*
- In Kansas – a spouse or child under 18 and is paid as a W-2 employee, is considered an employee. This is true for most carriers
- In Missouri – BCBSKC will offer a group plan to husband, wife and 1 employee with salary documentation.*
- In Missouri – Businesses with a spouse or child under age of 18 of an owner is not considered and employee. This is true of most carriers.
*Acceptable forms of documentation for these new eligibility requirements include W-2s, W-4 withholding forms, KW-3 (Kansas Groups), or employer quarterly contribution and wage reports.
If you have 3 full time paid employees (husband, wife and 1 fulltime person) there are group plans available with some of the other major carriers; Aetna, Humana and UHC. Each carrier has a variety of plan designs and contribution structures that could fit your budget.
Susan Reed of Hallier Reed Employer Benefits Consulting, Overland Park, KS, works with small businesses in Kansas and Missouri to assist them with the selection, implementation and management of health insurance programs. In her practice, she keeps her clients up to date on important legislative changes. Susan educates employers and employees to make sure they understand this valuable benefit.
Email us to receive Susan’s contact information.