California health insurance
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5 Ways to Save
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Move to ACA Plans During Renewals
Is Your Company Up To Date on the ACA Changes?
If not, it could means $1000's in either savings or penalties.
That's not an exaggeration.
The IRS just (July 1st) notified companies that paying for
individual/family plans (not employer sponsored) will result in:
A penalty of $100 per employee per DAY. Yes...$36,000 penalty.
Roughly
20% of California companies do this either unknowingly or at the recommendation
of agents/entities.
They are accruing a daily penalty right now and some are hoping the IRS
doesn't figure it out.
Good luck betting against the IRS to go after money.
That's just one instance of how new changes are completely transforming the
group health insurance market as a result of the ACA law.
Let's look at the 5 critical changes that every California company needs
to know
about (or pay as a result).
Tax Credits for Business
It's not all stick.
There's a pretty big carrot in the ACA law for California companies
that meet the following criteria:
- 25 or less employees
- $50K or less average salary (does not include owners or officers)
For these companies, they are can receive up to 50% of their employee
health insurance premium right away.
The monthly premium is reduced by this amount (no waiting till April).
We can quickly size up if you're eligible for these tax credits and quote all
the carriers that participate in the Covered California for Small Business
market.
Call 866-486-6551 or enter your
Company census here so we can run your tax credit eligibility
Penalty for companies that pay towards individual/family plans
Okay, so there are some sticks as well.
This is a big one and many companies are unaware.
We speak with them everyday and they either don't believe us (IRS
notification here) or they panic. Yes, believe us and No...do not panic.
So what's the deal?
A lot of California companies dropped group health insurance since the ACA
law came into effect because their employees could go get tax credits on the
Covered Ca individual market (you can
quote that here).
Great news...employers reduces cost of health care and a lot of
employee get subsidized health coverage.
Good news for everyone but the IRS.
The IRS calls this double dipping. The employer is getting tax
deduction on contribution to employee benefit. The employee is also getting tax
credit from Covered Ca.
IRS is not happy.
IRS issues "clarification".
If a company (even small business down to 1 employee) contributes to
an employees individual/family health plan, there is a penalty of $100 per
day per employee.
It's a big stick and meant to send a strong warning to companies.
If you're in this situation, call us immediately.
We can help you either establish a group health plan with the best rates (and
maybe even the tax credits established for companies) or advise on compliance
with the law above.
New
cloud based HR and Payroll Systems
This isn't so much a result of the ACA law as a result of the internet.
About time.
We now have a new benefit system called SimpleFits which is going to make
employer's (or their HR person) lives so much easier.
It's also FREE to you.
For our clients, we pay for the entire system.
No cost except for a optional payroll integration with your existing payroll
company.
Paychex, ADP, any company with an internet interface.
This is a huge deal.
What can you expect?
- Simple one-click onboarding, offboarding, and HR management
- Payroll integration and benefit management is completely integrated
- Reporting and Compliance is full integrated
The real beauty of the system is the beauty of the interface.
We are very excited and proud of SimpleFits.
It's going to save you so much time and effort that you'll actually like
insurance agent.
We're pretty likable already but this is a clincher.
Call us at 866-486-6551 or email
help@calhealth.net for a free demo.
While we're at it, we'll also run a
full quote and proposal (including tax
credits) to make sure you getting the best rate.
Renewal to new ACA Plans for 80% of California Companies
Many
companies (approximate 80%) have opted to forego the move to ACA plans by first
grandfathering and then grandmothering coverage.
We've run out of time and frankly, out of grandparents.
Q4 of 2015 is crunch time
And most companies are going to feel the crunch when they see the new rates.
Here's the deal.
The ACA plans have to hit one of four benefit benchmarks (bronze, silver,
gold, or platinum).
A companies plan cannot deviate from these benchmarks by more than +-2%.
So what's the big deal?
For any company (or employee) that is on a lower priced, deductible plan, the
new plans don't match up exactly.
We've seen increases of 20-50% for the default transition plan
Employees are finding that their old plan was either richer or much less rich
than the new ACA benchmark available.
The old plans had no benchmark.
The net effect of this is that rates may jump or benefits may drop
significantly...and there is no middle ground.
That's what 80% of the California companies will have to face Q4 of 2015.
A completely new landscape for group health benefits.
We know from above that we can't pay towards individual/family plans so how
do we address this?
We have to start from scratch and this is how we will help.
We will run a complete benefit proposal reflecting all the new options
including:
- Availability of tax credits
- Comparison quote across all major carriers
- Private Exchange options which can be priced better for certain
carriers/plans
- HSA and HRA options to reduce the cost
- POP 125's, Sectoin 105's and other options to reduce out of pocket
Just enter your census information in the
Group Health Quote tool and we'll get started. Let us know your current
carrier/plan/rate and we'll get to work.
Our services are completely free to you.
Penalty for Larger Companies (50+ full time equivalent employees)
As
if the first penalty wasn't enough, larger companies are literally dodging
sticks.
There's a big one which is confusing but we'll break it down.
If a California company employs the equivalent of 50+ full time employees and
does not offer Minimum Health Benefits, they will be subject to a fine.
It gets a little more complicated but here's the net effect.
If a company offers no coverage, they are subject to a $2000
penalty/employee/year for all eligible employees.
This is the big one.
If a company offers a Minimum essential Coverage plan, they will subject
to $3000/employee that gets a tax credit at Covered California. This penalty
can fluctuate depending on how many employees are getting tax credits.
We know from above that we can't pay for individual/family plans so what
should a company do?
There are three options.
- Pay the penalty. Damn the torpedoes. (company may sink...no pun)
- Offer a MEC plan if it's less expensive (penalty only on employees that get
tax credit)
- Offer a full plan if it's less expensive (no penalty)
The calculation here has some additional wrinkles and it's complicated but
we're happy to run the numbers for you and give you a cost estimate for all
three options.
We'll make it clear, easy, and quote the best rates on the market. Email
at
help@calhealth.net or call 866-486-6551
for your free proposal and comparison.
A Quick Round Up of the Options
Okay.
Those are the big changes affecting the California group health insurance
market and if they haven't brought to your attention by your agent or carrier
then....well, we'll reserve our remarks.
We have notified all our clients and helped them evaluate the options in
advance so that they are not hit with a penalty (accruing right now) or find
themselves behind the eight ball when changes hit them.
If you want that type of guidance and help which directly translates
into savings and avoidance of penalties, feel free to contact us.
Our services are Free to you but our advocacy is invaluable.
Related Pages:
Online HR Benefit System
Saves Time and Money
5 Ways for
California Companies to Save on Health Insurance