5 reasons to provide health insurance to employees

This sponsored post is produced by TriNet.

It’s never a good idea to go without health insurance but new Affordable Care Act (ACA) penalties are making not having health insurance a more costly decision, especially for growing businesses.

In 2015, the tax penalty for not having personal health insurance has jumped to $325 per individual (half that amount for children) or two percent of your household taxable income, whichever is higher.

Additionally, businesses with more than 50 employees will now be known as Applicable Large Employers (ALE). ALEs are subject to ACA reporting requirements and those with more than 100 employees may be subject to penalties if they do not offer ACA-compliant medical coverage to full-time employees and their children. In 2016, all ALEs with more than 50 full-time employees must provide coverage or potentially pay penalties.

Avoiding hefty fines, however, isn’t the only reason to offer health care to your employees. Here are five more good reasons:

1. If you are self-employed, you are able to deduct the cost of your own health insurance. If you offer a group plan that covers you and your employees, those costs are tax-deductible as a business expense to you but not a taxable benefit for your employees.

2. If you offer plans with high deductibles and those that are aligned with a health savings account (HSA), premiums will be lower. Also, funds contributed to the HSA, by either the employer or the employee, accumulate tax-deferred and can be used for a variety of medical-related expenses.

Those who are concerned about cash flow, if an accident or life-changing disease should occur, can add a voluntary plan to their employee benefit package that provides accident and critical illness protection. These affordable plans can pay medical costs that are not covered under a $2,500 or $5,000 deductible health plan.

3. If you are a small business that is currently using health reimbursement accounts and related services as a vehicle to help employees purchase health insurance, a recent ruling by the IRS gave you extra time to meet ACA compliance standards.

4. You are able to provide wellness discounts and reward employees for good health habits that could save up to 30 percent on premiums. This is not allowed for individual plans but is permitted for group health insurance.

5. Finally, having a health insurance plan for your employees makes everyone part of one team. Studies show that a well-structured benefit plan increases worker productivity, improves job satisfaction and reduces turnover.

Growing businesses need a proactive strategy for dealing with health care costs. You should shop around at online comparison sites to get a good estimate of potential costs. You should also engage your employees in a discussion about what type of benefit plans fit the company culture — and its values.

Remember, there are tax penalties for you and your employees if they don’t have health insurance. And benefits for all of you if you take the time to structure a health insurance plan that meets everyone’s needs.

Jeff Smedsrud is CEO of HealthCare.com.

Learn more about TriNet by calling 888.874.6388 or go to TriNet.com/incredible. 

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