It’s no secret. Obamacare is expensive. And until the new administration makes the kind of changes needed to lower costs, it’s not going to get cheaper any time soon.
To make matters even more challenging, as of January 1, 2016, if your business employs more than 50 full-time employees, you must offer affordable health insurance to those workers or pay a fine for every uncovered employee. This fine is known as the Employer Shared Responsibility Payment, and that isn’t cheap either.
So what’s an employer to do about all those rising costs?
You can start by choosing Bronze.
Bronze level plans are the most affordable of the Obamacare plan options. Your coverage will still have all the benefits required by the Affordable Care Act but at the lowest premium. The tradeoff is that your employees will have to pay more in deductibles and out-of-pocket expenses.
A trend toward “defined contribution.”
36% of employers are now turning to what is known as a defined contribution strategy. The way it works is that you offer each of your employees a defined amount toward purchasing their own health insurance coverage. Your employee would then go out and choose their own plan to meet their needs.
If your employee exceeds the defined amount, they would be responsible for the remaining costs. This way, for example, a single person who is healthy, would not be forced to subsidize the care for a family of four with higher health care needs and higher premiums.
There are a few other benefits to think about too:
Any contributions you make are tax-deductible, and the employee receives these contributions tax-free
There are no minimum or maximum contribution amounts
Your employees will have access to the federal tax subsidies available on the marketplace
Enrollment in high-deductible consumer-directed health plans (HDHP) is on the rise.
These offer a higher deductible and usually lower premiums than traditional health insurance plans. High-deductible health plans are paired with a heath savings account (HSA) or a health
reimbursement account (HRA) which are tax-advantaged accounts that employees can use to pay for their health care expense.