Small Business Group Health

When is a small business group health insurance benefit not a benefit at all?

I had a recent small business client who believed he was giving his employees a very good benefit. He paid 50% of his employee’s health insurance tab, as well as, giving them two different carriers from which to choose. As is usual, he also made those plans available to his employees’ spouses and children, but for financial reasons, wasn’t contributing to their insurance costs at all. This is the normal way the benefit works for employees. They get assistance with their own insurance costs, sometimes up to 100%, while they have to shoulder the full cost for their family’s insurance.

Which brings us to a very large hole in the ACA (ObamaCare).

ObamaCare says that if one member of the family has access to an affordable healthcare plan, one that costs no more than 9.5% of that employee’s income, and if the other members of the family are able to sign up for that plan, even though the employer doesn’t contribute toward their costs, the family is not eligible for financial assistance—they are considered to have access to affordable healthcare.

What’s this mean to a Tehachapi family?

Let’s say Tom and Jan are married, 44-years old, have two kids, 9 and 4. Their household income is $52,000. Jan gets an Anthem Gold Plan at her work and her employer pays 50% of hers, but, although Jan’s family can sign up, the employer pays nothing toward their premium. Without going through all the numbers here (call me for the details), at work it will cost Jan’s family about $1061 per month to insure her entire family (which includes the employer’s contribution).

If her employer decided not to provide that benefit and increase Jan’s salary the $220 per month he would contribute to the insurance, Jan could then take advantage of the ACA for her whole family, the numbers would look like this. Her household income would now be $54,640. A gold plan PPO from Blue Shield would cost Jan’s family (after financial assistance) $449 per month, for a savings of $612, or 58%. Or, Jan could opt for a Silver plan for $321 per month, for a savings of $740, or 70%.

If you do have a small business and want to do the best for your employees, which I’m sure you do, you might want to look at your health insurance benefit. The ACA may give you ways to make it even better.

William Kritlow is a licensed insurance agent, CIL#0A93013. Contact him on his cell: (949) 394-4525 or email: [email protected].