Like just about everyone else, I’ve been paying close attention to what’s happening with healthcare reform this year, but not for the reasons most people think. I’m interested in what’s going to happen to small business health insurance plans.
Here’s what we know for certain: insurance rates for businesses on small group plans are still going to be outrageously high and coverage won’t compete with what big company insurance plans offer. But it looks like there’s only one impending change to a business’ small group plan — they can hold onto a grandfathered policy through the end of 2018.
Truthfully, that’s not as good as it sounds.
Don’t get me wrong, a lack of disruption is always a positive thing in business. Anytime you’re faced with shopping around for a new provider, educating your team about your new healthcare plans and fielding a year’s worth of one-on-one questions about employee benefits, options, insurance cards, and which doctors and hospitals are approved, you use up a ton of time that you and your HR team would probably rather spend focusing on business instead. But if you’re on a grandfathered small group policy, the fact that you’re not mandated to change healthcare plans in 2017 is really the only “pro” you’re getting.
The cons are this:
- You’re still spending more on small business health insurance and getting less in terms of benefits than you should be.
- Regardless of the carriers offered by your insurance broker, your small business will likely see a rate increase for 2018.
- Whether your business has a grandfathered plan or not, a small group health insurance plan is not helping you attract the talent that you want. Have you seen the benefits plans that big companies are offering?
To make the matter even more depressing: no amount of regulation is going to change any of this.
Keeping the costs down on your Utah small business health insurance
Now a little good news: you don’t have to keep your small group health insurance policy. Your small business CAN buy into a large group health insurance plan if you’re working with a PEO that offers large group health plans.
PEO means “Professional Employer Organization” — it’s a pretty unsexy term for an entity that basically runs your HR for you on an outsourced basis. Most PEOs work with a lot of companies, which means the PEO can use the collective buying power of ALL clients to access large group plans for every employee.
Unlike small group insurance plans, a large group plan uses averages, standardize rates, and considers risk pools to determine rate structures. That means a single employee with a big insurance bill one year isn’t going to jack up next year’s rates for everyone. When your small business is in a large group health insurance plan, you have less market volatility, more consistency to the price all employees pay, regardless of age or location, and rates that remain more consistent from year to year.
When changes are needed for healthcare plans, the PEO both shops around for you and fields questions from employees. (By the way, at Stratus.hr, most basic questions are answered via our mobile app so our clients’ employees can get answers any time rather than only during business hours, which is never really the time you need to know policy numbers and information.)
Plus, switching your small business to a large group healthcare plan ensures you’re offering a benefits package comparable to the package offered by large corporations. That’s always nice for recruitment and retention.
Your PEO may also be able to work on other services for you, including payroll that requires you to write just a single check each month, analytics that you can see anytime, paperless onboarding, applicant tracking systems and risk management. In general, everything is simpler, which means you’re spending less time on HR responsibilities. When your company grows, your HR team is still the right size because a PEO scales with your organization. And your insurance policy doesn’t need to change year-to-year because you’re in a large employer group policy, not a small one, even if you only have a handful of employees.
One last thing to note: I am fully confident that our government will continue to monkey around with healthcare and that whatever changes they decide on (or push through — however you want to look at it), it’s going to mean more hoops for your business to jump through. For me, that would be reason enough to work with a PEO, because a really good one will keep up with every regulation change and ACA reporting requirement that impacts your small business. Your PEO’s experts will ensure you’re always in compliance.