Employees are increasingly expecting employers to provide them with health insurance and other benefits. As a responsible and caring employer, you want your employees to have benefits.
Employee benefits can be complicated and there are common misconceptions that need to be addressed at a high level. Looking for insurance and making insurance selections may be a cumbersome and frustrating process.
We’ll address the misconceptions that come up most often.
“I’m only able to make benefit selections or changes during open enrollment.”
If you experience a big life event, such as marriage, divorce, or the birth of a child, you can add or remove dependents from your coverage, however, you’re unable to alter your benefits selection. There is usually a 30-60 day waiting period before you can enroll in benefits as a new employee.
“Employers cannot change the broker and/or add/alter benefits option outside of open enrollment”
Employers usually make benefit decisions 2+ months before benefits begin. It’s not typical, but if the need arises, you have the right as the employer to change your broker of record and/or add/alter your voluntary benefits options outside of open enrollment. You have to wait until open enrollment to change health insurance coverage.
“Health benefits are an ordinary business expense”
Employers should be aware that the Affordable Care Act provides healthcare tax credits for small businesses to help offset insurance expenses. Since the 2010 tax year, the small company health tax credit has been available. Small company owners must pay at least half of employees only health insurance premiums and have 25 or fewer full-time workers earning an average of $50,000 or less per year to qualify for a tax credit of up to 50% of two-year premium expenditure.
“I’m not allowed to obtain any health benefits outside of what my employer offers”
That isn’t correct. Individual policies including health insurance, dental, life, accidental death and disability (AD&D) insurance, critical illness insurance, and more, can be purchased as individual policies to augment employer-provided benefits.
Having coverage through a spouses’ employer in addition to your own is common. Employees may compare and contrast coverage to choose which options best meet their needs.
“I need a minimum number of employees for group insurance”
When a company reaches 50 employees, it is required under the Affordable Care Act to provide health insurance. A company must have at least two employees to be eligible for group health insurance and additional group benefits such as dental and vision care. Discuss the specific minimums for each benefit with your insurance broker.
As an employer, you are required to offer benefits to all full-time employees. Nevertheless, it is not uncommon for an employee to be required to wait 30-60 days for health coverage and up to a year for 401k/retirement benefits. The waiting time allows both the company and the employee to evaluate if they are a good fit, which is especially important these days given the workforce issues a lot of employers are having.