If the Employer Mandate is repealed by the US Congress, there will be significant considerations in how you can structure employee health insurance plans for 2018. Without an employer mandate, you would no longer obligated to offer full-time employees health insurance plans that are Qualified 60% Actuarial Value Bronze plans on an “affordable” basis.
This means the threat of an employer penalty would be over.
What are your possible options if employer mandates are reversed?
- Continue to offer the same high deductible bronze plan to all full-time employees.
You can consider whether to keep the same eligibility requirements, such as a 30-hour a week employee. You’re also free to move average hours worked to 35 or even 40 hours per week as the definition of a full-time employee.
This would have an immediate impact in that employers can return to having only full- and part-time employees. You will no longer be responsible for tracking the hours of hourly employees to determine eligibility status. This is good news for employers who are now free from the burdensome recordkeeping of “averaging hourly employees.”
Before the Patient Protection and Affordable Care Act (PPACA), there were many retailers who offered benefits for their management and staff on traditional major medical plans, and for hourly store employees offered first dollar limited benefit.
This was an attractive arrangement for both the company and the store employees. The company could deliver expensive major medical plans to key employees who had life assets that were important to protect (homes, automobiles and other accumulated assets), and typical hourly store employees had first dollar coverage that was both affordable and allowed that employee to visit a doctor and get diagnostic and prescription benefits on a first dollar basis, without the huge challenge of trying to meet a very large $5,000 or $6,000 deductible.
- Offer nothing.
This option, although financially attractive, might present challenges in the labor marketplace and retaining employees. For better or worse, Obamacare has set benefit expectations by employees that will carry forward for many years to come. And, high employee turnover comes at their own costs. What you likely would gain in not offering any health benefits, might be the most expensive option to you long term.
Quality employees, will expect quality pay and benefits. This has always been true, but especially so after the last three years. If your goal as a company is to attract and retain employees, compensation pay as well as health benefits will factor into that process.
There is still much to be decided this year, but regardless, there are possibly a lot of changes in store for your 2018 health care benefit plans. Our advice is to prepare now to consider the following actions:
- Look to take your benefit plan(s) to the market.
Find out what is available out there. Be a value shopper. After your payroll, for most companies your benefit plan represents the second largest expanse on your books. Do apples-to-apples comparisons, the dollars your save will benefit your company and your employees.
- Take an inventory of who is handling your benefit plans.
- Are they current?
- Are they on “autopilot”?
- Is “good enough” keeping you back?
- Is the thought of “change” a “risk or opportunity”?
- Is your benefit and tax strategy current?
- Take an inventory of how your employees view your benefit plan.
- The number of employees participating in your plan should be the first indicator
- Does your HR/Store Management/Recruiting staff, view your wage and benefit plan(s) as a net positive to attract the type of employees you need?
- Are you benchmarking your wage and benefits?
- Are you benchmarking your competition in your local labor market for wage and benefits?
- What tools are you using to benchmark? Are they relevant to your company’s situation?
With changes slated for 2018, it’s vital that your business recognize these changes and adapt your company’s strategies for the best possible outcomes.