Prioritizing Wellness: How to establish health and dental insurance for your small business employees
May 12, 2021 12:33 pm Leave your thoughts
In years past, small-business owners and their employees often faced a discouraging lack of options when it came to health and dental insurance. Some elected expensive private plans, without the assistance of employer cost-sharing. Others who qualified for Medicaid programs may have gone this route. The most concerning, however, were those who were left in the so-called insurance "gap," unable to qualify for Medicaid but also incapable of paying the exorbitant premiums of certain private plans. For these individuals, health and dental insurance often went by the wayside, and even a minor illness or injury could spell financial ruin.
The effects of this setup also impacted small-business owners, who often struggled to attract and maintain top-tier talent. These employees were often enticed by the robust benefit packages offered at larger companies, or required the stability of highly affordable health and dental insurance for themselves or their spouses and dependents. All around, the situation wasn't great for anyone.
Small Business Health Options Plan (SHOP)
Nowadays, there's a helpful solution in the form of the Small Business Health Options Plan (SHOP), a government program established with the hope of allowing small-business owners to offer suitable health and dental insurance to their employees. To qualify, a small business needs to have at least one FTE employee, not including owners, partners, or spouses and family members of owners or partners. Businesses hoping to elect SHOP coverage can also have no more than 50 employees.
SHOP coverage must be offered to all full-time employees, which generally includes anyone working more than 30 hours per week. Plans may also be offered to part-time employees, if desired. States have different laws regarding the minimum number of employees who agree to participate, and the time of year when employees can elect coverage based on participation. The SHOP website offers a handy calculator for determining the laws that may apply to your business.
Guidance for small-business owners
It's common for small-business owners to have questions during the process of selecting and offering health and dental coverage to their employees. For this reason, SHOP participation allows business owners to connect with a SHOP-registered insurance agent or broker, if their existing agent or broker is not already registered. Agents can help answer basic questions regarding eligibility, assist with coverage changes and even walk small-business owners through the Small Business Health Care Tax Credit.
Advice for small-business owners is available on the SHOP website, including guidance on selecting a plan. Prior to choosing a plan, owners should have an idea of how many employees intend to participate if offered the choice, as well as the sort of coverage that might be expected. Employees might need to weigh other factors, such as any necessary waiting periods for insurance to begin covering them, and what sort of costs might be involved for covering their dependents or spouses. No employee should be rejected coverage based on a pre-existing condition, which could also help alleviate fears about changing their existing coverage.
Appealing SHOP decisions
In the event that a small business is deemed ineligible for SHOP insurance plans, an appeal process is in place. A SHOP-registered agent or broker can help with the appeals process, although it may not hurt to have an attorney involved as well. The decision to elect health and dental coverage for employees can impact small businesses in various ways, and for this reason it is important for business owners to understand the entirety of the decision. If you're in need of legal advice regarding insurance options and other aspects of owning a business, reach out to the Law Offices of Donald W. Hudspeth, P.C.
Categorised in: Starting a Business in Arizona
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