Does your small or medium-sized company need to provide health insurance for your employees?
When your company reaches the 50-plus employee milestone (including the combined hours of part-time employees), the ACA requires that the organization provides affordable coverage. Reaching the 50 FTE threshold designates an employer as an ALE (Applicable Large Employer), obligated to provide affordable coverage meeting minimum requirements to at least 95% of workers. Failure to do so exposes the company to massive ACA fines, including a penalty of $2,900 per employee.
Providing healthcare to workers also helps your company prosper
Even if your workforce is below the threshold, that doesn’t mean you shouldn’t think seriously about offering coverage. Health insurance is consistently ranked among workers' most preferred benefit options, making it a productive tool for enhancing your recruiting and retention efforts. A US Chamber of Commerce study found that 83% of workers rated employer-provided health insurance as “extremely important” when considering a new position. Employees with access to workplace-based health insurance are more productive and loyal than those without.
Employers are discouraged by the high cost of health insurance
Offering healthcare coverage to your workforce is expensive, and more comprehensive coverage costs more. That’s one reason many smaller companies meet the ACA requirements by providing a MEC plan. MEC (Minimum Essential Coverage) plans were created specifically to help small businesses become ACA compliant and avoid substantial fines. Because of this, MEC plans are often limited to covering basic preventive care like vaccinations and routine screenings and are not as comprehensive as traditional health insurance.
When employees with MEC plans need more than very basic care, they may be left with large medical bills and become disillusioned and dissatisfied with their benefits. This adverse outcome may negate the goodwill an employer seeks by providing health coverage.
How can smaller companies provide beneficial coverage and stay within budget?
One recent development in health benefits models is the direct primary care option (DPC). This innovation is a healthcare membership. Participants (or a sponsoring employer) pay a monthly or annual fee to a primary care physician or group in exchange for access to a defined set of services. These providers typically offer expanded access, including telehealth options, prompt appointment availability, and a wider range of services, including mental health support.
It's important to note that a DPC membership is not considered health insurance and will not satisfy a business's ACA requirements. However, combining a DPC membership with a MEC plan is an effective way to keep healthcare costs low while still providing health benefits to employees.
Is DPC the future of medicine?
For a small or medium-sized company that can’t afford the high cost of traditional health insurance, a solution like a combination MEC/DPC plan is a tremendous opportunity. Many employers understand the financial challenges their employees face with insurance and healthcare costs. A Vitable plan, for example, lets these companies offer delightful, affordable benefits to their employees, avoid potential ACA fines, and protect their bottom line.
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