Small business health insurance in Pa has become very affordable for both owners and employees. Tax credits and incentives are easily available to business owners with fewer than 25 full-time employees. We make it easy to find the lowest rates offered by the most respected insurance companies in Pennsylvania. We help the self-employed find quality solutions for their daily needs. The more choices you and your workers have, the more likely you are going to have a satisfied work environment. A simplified buying process helps make enrollment much easier.
Affordable Care Act Legislation
The Patent Protection And Affordable Care Act (passed by Congress in 2010), gives special tax consideration to small businesses that provide medical insurance to employees. These tax breaks will help you save money, since much of the healthcare legislation was not overturned or substantially changed. We work with owners to explain what impact some of these changes may have on their income. Whether you are insured with Blue Cross Blue Shield, Geisinger, Keystone, Aetna, Independence Blue Cross, UPMC, or any other carrier, you will be affected.
If additional Government plans are fully implemented, we will show you the most important benefits, and how they can lower your premiums. It’s possible that within the next several years, additional lower-cost policies may be offered with specific limitations that are not found on Exchange contracts.
50% (previously 35%) of the cost of providing qualified health insurance is returned as a Small Business Health Care Tax Credit. For example, if the monthly premium to cover employees is $10,000, $60,000 is subtracted from the tax liability. Also, vision and dental costs will qualify for the exemption. In addition to the 25-employee rule previously mentioned, the average annual wage of workers must be less than $54,200, and a qualifying arrangement must be maintained.
Although this won’t pay all of the small business owner’s cost, it will put a huge dent in the outlay, and allow you to spend money on other important items, such as purchasing new equipment, hiring additional employees, or upgrading current facilities. The $54,200 amount is indexed for inflation and increases every year. However, the small business can not utilize a credit for healthcare premiums provided for the owner. Sole proprietors, partners, and members of partnership LLCs can take advantage of a tax deduction, but not a tax credit.
What also may help bigger companies is that the credit is determined by full-time workers and not part-time workers. So hypothetically, you could manage a company with 200 employees. If less than 25 are full-time, you probably will receive the tax help. If there are persons that need individual medical coverage, you can view information here. Association plans are also available. We also expect that future legal challenges will not substantially alter many of the new laws that have already been passed, that impact businesses. However, private medical coverage options are substantially changing, as “Obamacare” is slowly tweaked and improved. Replacement will probably not occur.
To stay competitive in the marketplace, it’s equally important to have skilled employees, and lower manufacturing and production costs than the competition. And naturally, to attract skilled employees, you may have to provide superior healthcare benefits, which isn’t always cheap. However, often, there is a simple solution that is very easy to administer. And all of the “brand name” carriers offer it. A combination of HSA options, and low-deductible comprehensive plans, provide multiple choices that satisfy the great majority of employees. Many large insurers offer Group benefits to companies with 2-50 employees.
The goals of the Agency are very direct. They seek to: Improve the claims process and hasten benefit payments to consumers, improve financial and physical infrastructure, create a quality and safe work environment, and help injured parties return to work as quickly as possible, with job-placement assistance.
Workman’s compensation issues are handled directly by the Pa Department of Labor and Industry. Their website is located here. If you suffer a work-related injury or illness, you may be eligible to file a claim. Wage-loss compensation and death benefits may be paid to yourself or your survivors, if applicable. Medical treatment and vocational rehabilitation are also covered. If you are actively employed, you are probably covered by these benefits. You can also find additional information on finding a job, finding and hiring employees, searching for an interpreter, job gateways, and online business registration.
Federal and state statistics are constantly updated, and any legislative changes are also posted. Additional related Agencies include Federal Black Lung Program, Energy Employees Occupational Illness Compensation Program, Protecting Our Workers and Ensuring Reemployment Initiative, Longshore and Harbor Worker’s Compensation Program, and Federal Employees’ Compensation Program.
Workplace laws and safety standard information is also provided by the Department. Legislation is constantly changing, and it’s important to be aware of the impact of any new laws that may impact your company or your workers. Also, if a worker receiving benefits has a change in health, the payout could be impacted. Eligibility for Medicaid or Medicare could also impact the amount of compensation received. Sudden changes in household income may impact eligibility in several state plans.
The SHOP Marketplace
What is the SHOP Marketplace? It’s the “Small Business Health Options Program” that assists employers and small business owners in finding affordable qualified medical and dental coverage for their employees. It’s a component of the Affordable Care Act that pertains to business entities with 50 or less full-time workers. Three years ago, coverage was extended to employers with 100 workers.
Previous choices were provided by several carriers that did not offer Pa private coverage (UnitedHealthcare and Aetna). In 2021, additional companies may re-enter the market, as more plan options become available. Future legislation may also impact policy options.
The Small Business Health Care Tax Credit (previously discussed) is available for companies with less than 25 full-time employees (FTE). The average salary of employees also must be $50,000 or less, and at least half of the cost of benefits must be paid by the employer. Plans are offered to full-time employees. Seasonal workers typically are not included when calculating the percentage of full-time workers. An exception is if they work more than 120 days throughout the year.
There is a prerequisite of offering benefits to all employees. Therefore, specific workers can not be singled out for inclusion or exclusion. Spouses can also be offered coverage, but changes to plans can not be made throughout the year (only during Open Enrollment). A “special” enrollment period will be available for unique situations, such as changes in family status, divorce, death of spouse, or loss of qualified medical benefits.
Employees generally like the SHOP option since they can compare and review quotes from several companies and inform the owner which plans they prefer. Health only, dental only, or both, can be offered to employees and their dependents. The owner determines how much of the premium they will pay. Enrollment is simplified since a broker can help with the online process. There are no fees, and often, HSA options ate offered. Employees can opt out of plans at any time. However, if outside of the Open enrollment period, alternative plans may have to be selected.
Consider An HSA
The combination of a Group high-deductible catastrophic medical plan with an HSA option is an affordable way to keep everyone happy. The business owner pays less premiums and the employee takes a little more risk. But when this type of plan is properly explained to workers, they often to embrace the concept and look forward to the possibility of accumulating savings while reducing their taxes. Consecutive years of low claims can result in quicker accumulation of funds inside the savings account.
These funds can be utilized in the future to help pay for deductibles or other out-of-pocket expenses. Deposits can be systematically made or at the time when large medical bills are due. Expansion of deductible medical expenses is expected within the next three years. Additional tax breaks may also be offered, depending upon proposed legislation. Dental and vision expenses also qualify for tax deductions.
Individual 2020 HSA annual out-of-pocket expenses can not exceed $6,900 for individuals, and $13,800 for a family. Annual contributions are capped at $3,550 for individuals and $7,100 per family. “Catch-up” contributions of $1,000 are allowed for persons over age 55.
Employees are rewarded for a healthier lifestyle and numerous discounts to health spas, YMCAs, fitness centers and many other exercise-related facilities. And why not? A healthier worker is more productive and saves the insurance company millions of dollars in potential large claims. You can find Pa HSA Rates on our website. We’ll help calculate your tax deductions and federal subsidies. We also help you choose the most cost-efficient combination of deductible, coinsurance, and maximum out-of-pocket expenses. The side account is generally managed by a bank or similar financial institution.
The concept of a reimbursement account is usually viewed favorably among employees, since they have more control over how benefits are delivered and how expenses are paid. If money is not used for the current year, it can roll over to the next year. Funds can be easily withdrawn at any time since the customer controls the account. It’s also very possible that in future years, (perhaps 2021) a combination of HSA deposits and contributions may provide additional reasons to select this type of policy. More funds may be allowed to be deposited and more favorable tax treatment is also possible.
With this type of coverage, the biggest variable is the deductible that the employee will have. A lower deductible is the most attractive and of course, the most expensive. But business owners can “buy down” the deductible for an inexpensive price. Thus, everyone is satisfied with the benefits they have and the price they are paying for a quality medical group policy. Dependent rates are usually low, even when they are between the ages of 21-26. Once off their parents’ policies, low-cost options remain available along with guarantee-issue plans.
For example, a high $5,000 deductible offered to workers with 100% preventive benefits will keep premiums down for both employer and employee. But optional $2,500 and $1,000 options (and sometimes $500) may be available from the insurer. These lower-deductible options may be very attractive to specific workers that are critical to your business and must be retained. $6,000 and $7,000 deductible options may also be very cost-effective options for healthy families. However, if maternity benefits are expected to be used within the next 12 months, it’s important to select an option with the lowest maximum out-of-pocket expenses.
Depending on how the separate fund is set up, an employee who is leaving, may be able to take their accumulation with them and either transfer to another account, or receive the proceeds in cash. Although there may be tax ramifications, this option becomes a very attractive benefit offered by the owner of the company. And as a result, perhaps better, more skilled workers will become available. Newly-hired workers can also retain an existing account without penalties or taxes.
Many major investment firms will easily handle the rollover. Fidelity, Charles Schwab, and Ameritrade are three popular choices. Accumulated funds may be used by Seniors paying qualified Medicare expenses. If the HDHP is no longer active, additional deposits into the regular account can not be made. Funds may be withdrawn, although there may be a limited tax liability. During this time, investment income is still earned and monthly administrative expenses (if applicable) will be charged.
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
A QSEHRA offers individuals free money if they work for a company with less than 50 employees. The worker utilizes the funds for their healthcare coverage. More than $800 per month (per family) can be contributed by the employer. Many expenses are eligible for deductions, including deductibles, prescription drugs, copays, and policy premiums.
Often described as a small business HRA, these types of plans help a business offer quality medical plans to employees regardless of health conditions. Since they are not considered qualified group plans by the IRS, ERISA requirements do not apply. Also, payment that reimburse worker’s medical expenses are not included in an employee’s gross income if the plan meets MEC (minimum essential coverage) requirements.
Proof of usage must be submitted, along with a description, cost, and date of purchase. The item is reviewed, and reimbursement is sent from the funds that have been provided for qualified expenses. A monthly allowance of available expenses is determined by the company. The maximum amount is $5,150 per person and $10,450 per family.
Let Us Help You Shop
One of the most important methods to reduce small business premiums is the simplest! Shop and compare. Not necessarily 10 different companies, but approximately 2-4 carriers including your local Blue Cross company. Highmark, Keystone and Capital Blue Cross may not always have the lowest rates (although often they do), but they can negotiate lower healthcare costs by utilizing the power of their networks.
Aetna and UnitedHealthcare, since they are national companies, should also regularly be included in the quote process. Humana and Cigna are more active in the Senior market, rather than the private small business market. Additional companies, including Kaiser, may offer Keystone State options in the future.
Health insurance premiums on small and large businesses tend to increase quicker as the makeup of the group changes. As more healthy employees leave the group, premiums quickly increase. For that reason, it’s always wise to either obtain new quotes, or negotiate with your current provider every 2-3 years. It will be one of the best financial decisions you ever made. The Department Of Revenue may also be able to assist in some of your tax issues, including refunds and rebates.
You can use our free quote request form to provide some basic details needed to compare premiums. We’ll utilize every available resource to find the most affordable options. We help you find the cheapest Pa small business healthcare plans that will be easy on your budget and keep your workers loyal and productive. As new legislation is passed, we will provide updates, and explain how new laws will impact employers and their workers.