Helping Employees Access Health Care While Easing the Burden on Small Businesses

In December 2016, former President Obama signed an important health care access act that will help alleviate the burden of employee health insurance on small businesses.

The 21st Century Cures Act will allow, among other things, small businesses to reimburse their employees for individual health insurance if they do not offer a group plan. For small companies with less than 50 full-time equivalents (FTE) employees, managing a company-wide group health insurance plan can be a complicated endeavor that saps valuable time and resources. To counteract this, the 21st Century Cures Act will help small businesses contribute to their employees’ health insurance premiums with relative ease.

Businesses don’t have to pay payroll taxes on the reimbursement and can escape the administrative headache of maintaining a group plan. And employees don’t have to pay taxes on their employer’s premium contribution. This can help small businesses attract employees who want health care coverage without taking on the responsibility of managing a group care plan. Businesses must offer the reimbursement on the same terms to all employees but can adjust the amount based on the employee’s age and family size.

Many small businesses that offered employee insurance coverage through group plans under the Affordable Care Act have struggled with the resources required to manage them. Under the 21st Century Cures Act, however, the costs are more manageable, and the administrative responsibilities are significantly reduced. The new act also reduces employer liability when it comes to maintaining coverage.

Helping boost employees’ health care access can make you a more competitive employer to those on the job market (especially here in South Florida where there are more open jobs than prospects.) But as a small business, you may also be concerned about the benefits and responsibilities that come with offering premium reimbursements. For example, there are caps on premium contributions, rules on small business health care credits, and regulations in place that can make switching from a group plan to a reimbursement model complicated for any small business. With so many rules and regulations to consider, professional guidance is highly recommended.

If you need help with employee health care access, start by sitting down with us. As your Family Business Lawyer®, we can help you structure contributions to your employees’ health insurance premiums while minimizing your costs and administrative burden.

Developing a trusting relationship with a Family Business Lawyer® will ensure your business can meet the needs of your employees while still protecting your best interests.

This article is a service of A. J. Yolofsky, Family Business Lawyer®. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. As your strategic advisor, we strive to provide a return on investment to your business. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.