How to Provide Health Insurance to Employees

Offering health insurance to employees can give your business an edge and attract and retain top talent, but can also be complicated and time consuming.

Your employees must be educated about their options and attend open enrollment meetings, while applications should be submitted directly to insurers and materials such as ID cards distributed.

Employee Eligibility

When it comes to providing health insurance to your employees, you must follow all rules and regulations. Employee eligibility is at the core of compliance. Every employer should abide by a list of important eligibility “do’s” and “don’ts”.

Under American law, all eligible employees must be given the chance to enroll in your company’s group health plan. Eligible workers include full-time and part-time workers who spend 12 months or 1,250 hours working for your company, such as contractors, interns or temporary staffers. Certain categories of workers such as contractual and seasonal employees do not qualify; however it may be possible to offer individual plans that satisfy Minimum Essential Coverage (MEC) standards instead.

Employers seeking to ascertain an employee’s eligibility must complete and submit the Employment Eligibility Verification Form I-9, including reviewing their identity documents and legal authorization to work in the US. Employers should then use E-Verify to validate that all details provided about an individual employee are accurate.

E-Verify is an Internet based system used by the Department of Homeland Security and Social Security Administration to verify employment eligibility. This process uses employee I-9 Form data provided by them against government databases to confirm both their identity and legal eligibility to work in the United States. Companies should adhere to E-Verify rules when conducting E-Verify verification processes – this includes electronically storing forms as well as authorizing representatives viewing original documents for remote workers unable to be seen in person.

Companies increasingly are providing health insurance to part-time employees as a way of attracting talent, improving morale and controlling costs. This trend can be found across numerous industries from retail stores to restaurants to financial services firms; it’s essential that they understand all requirements before offering coverage to part-time staffers.

Do’s of eligibility include providing all eligible employees the chance to enroll in your company’s health insurance and complying with nondiscrimination requirements, while major “don’ts” of eligibility could include offering coverage to non-employees such as independent contractors and mandating waiting periods of more than 90 days.

Open Enrollment

Open enrollment is a designated period, usually held every fall, during which current employees can make changes to their benefits, such as adding or dropping coverage, without incurring penalties or incurring premium surcharges.

Employees may use this as an opportunity to contribute to their flexible spending accounts (FSAs) or health savings accounts (HSAs). FSAs allow workers to set money aside pretax for eligible medical expenses; HSAs offer triple the benefits of FSAs.

Employers that offer employer-sponsored plans need to inform employees about any open enrollment periods. Furthermore, having a plan provider or HR professional available during these open enrollment periods may prove invaluable in providing answers and helping employees make their selections.

Employers should go beyond providing employees with education on their health insurance options during open enrollment by encouraging participation in their company wellness program. Doing this will enable employees to take control of their healthcare costs by adopting healthier behaviors that promote overall health as well as the company bottom line.

Companies should prepare in advance of open enrollment by verifying all information about the new plan year is correct, determining which payroll updates need to take place and communicating with plan providers regarding any changes in benefits.

As part of their open enrollment process, businesses should make sure their employees understand all available options and comply with federal requirements, such as identifying which plans are Affordable Care Act-compliant. While Rocket Lawyer provides general legal information, we do not offer advice tailored specifically to each situation – for legal help with specific cases please reach out to one of the network attorneys on our network or for additional details please visit How to Give Legal Assistance.

Enrolling Employees

No matter if you handle employee benefits yourself or work with a broker, starting off by conducting an accurate census will ensure an accurate representation of all eligible employees and dependents. That way, data about them and their dependents can then be used to get quotes from insurers.

Once you’ve collected quotes, it’s time to compare options and select one plan. Some factors to keep in mind when making your selection include cost, coverage limitations and employee satisfaction. When looking at PPO (Preferred Provider Organization) health insurance options, be sure to ask about its network of participating providers as well as out-of-network care costs. You should also inquire about POS plans (Point of Service), which offer more flexibility with selecting medical providers but may incur more in out-of-network care expenses.

When offering group health insurance, an open enrollment period must be held to allow your team members to enroll or make changes to their coverage. Usually held from November to mid-December and taking effect January 1st if any modifications occur; any such modifications must also include filling out a waiver of coverage form in this instance.

Communication between team members regarding benefits offered and enrollment during open enrollment is of utmost importance. You should arrange meetings or emails well in advance so everyone has all of the information they require.

As part of your employee outreach strategy, sending out surveys to your team members to assess their level of satisfaction with current coverage and solicit their ideas for what needs to change or be added for the coming plan year is highly advised. It should also be done well before your open enrollment period so your employees have time to review their current benefit elections and make any necessary modifications before the deadline arrives.

Tax Incentives

Tax incentives provide governments at all levels – local, state and federal – with tools for meeting both short- and long-term goals. Targeting can include individuals or companies; specific time periods or locations; job creation/economic growth initiatives or factors; encouraging certain behaviors while discouraging others and even fines or penalties in cases of violations.

Offering health insurance as part of a competitive compensation package can help employers attract and retain employees, while also offering tax advantages for the company. Employer-provided premiums for group health plans are typically exempt from income tax; costs associated with employee contributions to HSAs or FSAs can also be deducted. Furthermore, small businesses may even qualify for special tax credits when offering coverage.

Cost is one of the primary considerations in offering health insurance to employees. If the plan is too expensive, few will sign up and the associated expenses would become prohibitive for employers providing coverage.

However, there are various strategies available to companies looking to mitigate the costs associated with providing insurance. One is to limit who can enroll; offering plans voluntarily may also help lower contributions from employees.

Employers can lower premium costs by offering higher deductibles, which will provide an added incentive for high-cost or unhealthy employees to join the plan since it will lower out-of-pocket medical expenses.

Employers that wish to offer voluntary plans must ensure they are affordable for at least 95% of full-time employees and their dependents, or face fines. Furthermore, employees should have an easy way of opting out by submitting a signed waiver form directly to their employer – although this makes fulfilling minimum participation requirements for insurers harder, but can provide firms that cannot afford full health coverage with an alternative solution.