When you think of employee benefits, your initial reaction isn’t most likely connected with offering your employees lower wages or having to pay more on taxes.
As an employer, you should know the ins and outs or logistics that go into your employee benefits program, and determine if they actually offer “benefits” to your employees.
Some employers may be subtle in their explanation regarding these benefits, such as stock options in place of a higher salary, time-off benefits, bonuses, and of course, health benefits. Healthcare benefits are one of (if not the most) popular perks impending employees consider when seeking employment.
As of this year in 2015, the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, requires businesses of 50 employees or more to provide its staff members with sufficient healthcare coverage. If opting to ignore, employers are subject to government-issued fines, which can be determined using this Obamacare penalty calculator.
If you’re a smaller business employer, here are the top pros and cons regarding what to consider if choosing to provide your employees with healthcare benefits:
Pros
Attracting and acquiring talented employees: The decision to provide health benefits to your employees can result in assisting you to allure the most qualified candidates. However, when designing your employee healthcare benefits, you should research what competing businesses are offering their employees to gain a better context as to what to offer.
Healthcare tax credit: Employers with 25 employees or less are eligible for a tax credit as a reward for purchasing health benefits for their staff.
Keeping your employees healthy: Workload and efficiency is directly affected by the health of your employees. By providing healthcare assistance to your staff, you’re ensuring your business is less at risk of unhealthy workers and at better risk of work efficiency.
Healthcare tax credit benefits: If you’re an employer of 25 or fewer workers who on average make $50,000 or less a year, you may be eligible to receive tax credit for offering healthcare benefits. Eligibility also requires you to pay for 50 percent of your full-time employees monthly premium payments as well as opting to cover full-time employees via the SHOP Marketplace.
Cons
Higher costs: Over the past recent years, healthcare costs have increased dramatically; for this reason, small business employers are spending less on employee resources and more on healthcare for employee benefits.
Liability issues: When you offer healthcare benefits for your employees you are putting yourself and business at a higher risk of medical-legal issues, such as malpractice.
Time-consuming: Sure, the healthcare insurer you choose to provide your employees with will act as plan administrator; however, you are still obligated to spend time filling out forms, remitting premiums, and acting as the “middleman” between your employees and insurer.
Cost-sharing issues: Although you’ve provided health benefits to your employees, they’re still responsible for co-pays as well as other payments pertaining to health screenings, emergency situations, etc. Obliviously, this helps to decrease your financial obligations to your employees but puts you at higher risk of tension concerning cost sharing with your employees.
