One way that small business owners have tried to work with ACA guidelines is to pay their employees a little more so they could go and get their own individual health insurance coverage. The idea seemed plausible, even sensible at the time, but that is all changing this year. The Obamacare system is shaking things up in 2017 and employees with individual health insurance coverage will be paying a price that they likely cannot afford.
Individual health insurance coverage for the average person has been barely affordable from the start. The rise in its popularity came as the Federal government mandated healthcare coverage for anyone residing in the United States. Small business owners and self-employed people needed to find companies that were willing to sell health insurance to an individual or a very small group. For the insurance companies that offered such coverage, it was often too expensive and offered paltry benefits in return. A little revamping and soon offerings emerged that were more financially palatable to both all parties.
Where Individual Health Insurance Coverage Is At Now
When an individual is looking for health insurance coverage for him or herself, one of the main concerns is how it will impact their monthly expenses. When you are living paycheck to paycheck, extra expenses mean a lot. So when these individuals set out to compare individual health insurance coverage, they are looking at what the monthly payments will be first.
Many of these plans are anywhere from $400 to over $600 per month for an individual. That would be a sizable car payment but many employees who have group coverage at a larger business have that taken out of their checks per month as well…pre-tax.
The next factor in individual health insurance coverage is the gigantic deductible that must be met before any coverage at all takes place. That means every doctor’s visit, prescription, anything and everything medical expense is coming out of the wallet of your employee. Doesn’t sound that great any more, does it? Factor in that deductibles for individual health insurance coverage can be anywhere from $2,500 to over $6,000 and you have a steep mountain to climb before any medical expenses are covered. Ouch.
The little more that you might be paying for your employees to get their own coverage probably doesn’t cover the $10,000 dollars per year or more being spent for the average individual, does it? For a healthy worker, the premiums they pay are merely going towards holding an insurance card and avoid fines levied by the IRS. Nothing more.
2017 Changes Will Make Affordable Individual Health Insurance Coverage Worse
When larger insurers agreed to be part of the Obamacare pool of offerings the government knew that they would have to agree to offer premiums that were lower than what they normally charge. Those insurers would also incur more expense from taking on any new member, regardless of medical condition. This was a good thing; no pre-existing condition clause meant that anyone could get health insurance coverage. Of course, that comes with a cost; to you, to them, to us all. In order to incentivize larger insurers to agree to the Government’s terms, they covered the additional expenses to the insurers in the form of government subsidies. Those are going away as of 2017. Guess who will now be picking up the tab?
Insurance companies are not in the business of losing money, when health costs go up, so do your premiums, so do your deductibles. The cost of health insurance will likely increase for all this year but especially those with individual health insurance coverage. How will your employees cover those increases?
How PEOs Can Help Your Employees With Health Insurance Coverage You All Can Afford
If you have been one of the small business owners who have taken this road because small group health insurance was out of reach, a PEO could be the answer to your budget constraints and your employees getting well deserved, great coverage at a price you can all afford. PEOs are able to offer enterprise level coverage by pooling all of the employees from the thousands of small businesses they work with into one large group, thus creating a large group health plan solution for everyone involved.
A PEOs health insurance coverage is substantially less than group and individual health insurance premiums. What a PEO can do for your small business is combine your health insurance and payroll headaches into one total HR outsourcing solution that allows you, the small business owner, to get back to focusing on what you do best, build your business. You’d be surprised by how affordable a PEO is. Find out how to give your employees great health insurance coverage without breaking the bank today.