If you operate a small business (with fewer than 50 full-time and full-time equivalent employees), what you include in your employee benefits program is largely up to you. However, “choice” in a benefits program is always important. The more choice you can offer, the better for your employees.
In addition, if you are what the Affordable Care Act (ACA) calls an Applicable Large Employer (ALE), you are subject to the ACA’s employer mandate.
That means, you are required to offer minimum essential health insurance coverage to full-time employees and their dependents. If you don’t, you face a potential ACA penalty. Coverage also must be “affordable” and must provide “minimum value” to eligible employees.
The IRS says an employer-sponsored plan provides minimum value if it covers at least 60 percent of the total allowed cost of benefits expected under the plan.Employers generally mustuse aminimum value calculatorto determine if a plan provides minimum value.There are also safe harbor plan options that employers can consider.
According to the California Employment Development Department, in Q2 2023, 97.2% of the state’s employers had 49 or fewer workers. So, odds are, your business is not an ALE. But it could be. Use the HealthCare.gov website’s Full-time Equivalent (FTE) Employee Calculator to find out.
What to Include in Your Benefits Package
An article by Forbes Advisor, Best Employee Benefits in 2024 says that 62% of businesses have changed their benefits package in the past year. Have you? If not, it might be time to consider it. Keep in mind, some workers are ready to jump ship for more attractive benefits. (Employers told Forbes it could be as high as 40%.) One in 10 employees would take a pay cut for better benefits.
According to Forbes, the top five benefits that people want are:
- Employer-provided health care (two-thirds of workers believe this is the most important benefit)
- Life insurance (nearly half of employees – 45% — named this as a top benefit)
- Pension and retirement plans (a third of employees consider this vital)
- Mandatory paid time off (nearly one-third – 31% — of employees named this a top benefit)
- Mental health assistance (about one-quarter – 23% — of employees considered this a top benefit, as compared to 33% of employers)
The Kaiser Family Foundation (KFF) 2023 Employer Health Benefits Survey found that among firms offering health benefits, most (91%) offer separate dental coverage – nearly double the percentage offering it in 2010 (46%). Also up dramatically since 2010 is vision insurance (82% now vs.17% then).
Group health insurance compliant with the Affordable Care Act must include 10 essential health benefits:
- Ambulatory patient services (outpatient care you get without being admitted to a hospital)
- Emergency services
- Hospitalization (like surgery and overnight stays)
- Pregnancy, maternity, and newborn care (both before and after birth)
- Mental health and substance use disorder services, including behavioral health treatment like counseling and psychotherapy
- Prescription drugs
- Rehabilitative and habilitative services and devices (services and devices to help those with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care (does not include adult dental and vision coverage)
That means, if you have an ACA-compliant health plan, it includes sought-after health benefits as well other things that employees want.
One Source or Multiple?
When looking for employee benefits, it’s natural to ask if one insurance carrier or benefits advisor can cover all your needs. There are brokers who work with various administrators and carriers, making it possible to create a bundled program for you and your employees. Some carriers might even provide both medical and extra benefits, such as dental and vision.
You may want to consider a multi-carrier, employee-choice exchange to give your employees the freedom to select coverage that fits their personal or family health care needs. A program tailored for small businesses, like CaliforniaChoice, offers this flexibility. Since its inception in 1996, CaliforniaChoice has provided employees with a variety of health plans and coverage options to choose from, boasting more than 130 options in 2024.
CaliforniaChoice is recognized, too, for offering employers better control over costs. You decide how much to contribute towards your employees’ coverage. You can opt for a Fixed Percentage (50% to 100%) of a specific plan and/or benefit, or choose a Fixed Dollar Amount for each employee. (The contribution needs to be the same for all.) Your employees will then use your contribution toward the cost of their preferred plan. If their chosen plan costs more than your contribution, they cover the difference through payroll deduction.
You can give employees access to plans in one, two, three, or all four ACA metal tiers (Bronze, Silver, Gold, and Platinum). Each tier offers a different percentage of shared health care costs for employees. It ranges from 10% to 40%, with the health plan paying the other 90% to 60%. Employees can choose whether they want an HMO, PPO, EPO, or Health Savings Account-compatible plan. In a 10-employee group, each employee could be enrolled in different coverage. The choice is theirs.
But employee choice doesn’t end there. Added benefits for other coverage are available with CaliforniaChoice, too.
Optional Add-Ons
You can add benefits for dental, vision, chiropractic, life, and AD&D for employees.
- Three dental plans are available: a MetLife Dental HMO (DHMO), a SmileSaver DHMO, and an Ameritas PPO.
- The Voluntary Vision program offers comprehensive vision benefits and prescription eyewear savings.
- Landmark Healthplan offers chiropractic only or chiro and acupuncture benefits.
- Assurity Life offers life and AD&D coverage, including a living benefits provision.
Valuable Extras, Too
Two other features are available at no added cost to your business.
The Business Solutions Suite includes:
- Flexible Spending Account (FSA): Employees can put money away, pre-tax, to pay for eligible out-of-pocket health care expenses. (Available to groups with 15 or more employees.)
- Premium Only Plan (POP): A no-cost POP reduces your payroll taxes, and it gives your employees the ability to pay their share of insurance premiums with pre-tax dollars.
- Cal-COBRA or COBRA Billing: Depending on your group size, you can get federal COBRA or Cal-COBRA participant invoicing, premium collection, remittance, and payment tracking.
The Member Value Suite includes:
- Reduced fees on dental procedures at participating Dentegra® Smile Club dentists.
- EyeMed vision coverage with frame, lenses, and eye exam discounts at participating LensCrafters, Pearle Vision, and Target Optical locations + independent providers nationwide.
- Up to 50% off hearing tests, hearing aids, batteries, and more through EPIC Hearing.
- Employee discounts through the Cal Perks program on movie tickets, theme parks, water parks, travel, and more.
- Prescription drugs savings with the California Rx Card; you may be able to reduce your cost to less than your Rx copay with health insurance.
- ChooseHealthy® program savings on Garmin, Vitamix, Nutribullet, and Fitbit products as well as food delivery, fitness equipment, fitness center memberships at just $28 a month, and more.
Talk With a Broker to Learn More
Ask your broker about the health plan options available in your area to groups of your size. You can learn more about CaliforniaChoice, get information about potential costs, find out what providers are part of each plan’s network, and more. If you don’t already have a broker,we make it easy for you to search for one.
