According to a recent NFIB survey, 44% of small businesses do not offer health insurance to their employees. Why? A majority of those responded that it is too expensive. The Affordable Care Act gives small businesses more insurance options and possible tax credits. If you have less than 50 employees, your employees have even more options, thanks to many affordable individual plans under the Affordable Care Act.
How can my employees qualify for individual plans?
If you have less than 50 employees and don't offer health insurance, your employees can shop for coverage using the Healtcare Marketplace. Thanks to the Affordable Care Act, many plans purchased through the Healthcare Marketplace qualify for Premium Tax Credits. In 2022, about half of the individuals enrolled in sponsored plans through the Marketplace paid less than $50/month for their health insurance.
What are Premium Tax Credits?
The Affordable Care Act introduced Premium Tax Credits when the government passed it in March 2010. This credit is available immediately upon enrollment in a qualified insurance plan. You can choose to have premium tax credit payments go directly to the insurer, reducing your monthly premium!
The American Rescue Plan Act increased the credits' size and made more people eligible for the credits beginning in 2021. In addition, the recently passed Inflation Reduction Act extended these credits through the end of 2025.
Let's look at an example.
Marketplace Healthcare Plans are grouped into four metal tiers, each representing the premium cost vs. out-of-pocket expenses for care:
- Bronze is the lowest premium tier; you'll pay the highest out-of-pocket amount for care.
- Silver has lower premiums, and you'll pay a moderate out-of-pocket amount for care.
- Gold has higher premiums, and you'll pay less out-of-pocket for care.
- Platinum has the highest premiums, and you'll pay the lowest amount out-of-pocket for care.
Chart courtesy of Which Metal Plan to Choose
In our example, we have a family of 4 living in the Bay Area in California. The ages of the family range between 11 and 35. The Adjusted Gross Income of the household is $90,000. They are eligible for $1028 per month in premium tax credits. They could get a Silver plan with a major carrier for just $520/month. They could get a Bronze plan with a major carrier for $0!
How can Xiggit help?
Xiggit can work with you to determine if group or individual plans work best for you and your employees. If you decide to go with individual plans, you can offer to pay a portion (or all) of your employees' premiums. And thanks to Xiggit, that portion can come directly from your employees' paychecks, giving you peace of mind that your employees are paying for the insurance they intend to have. Contact us today for a no-obligation conversation!