Author Topic: Question for small business owners  (Read 1922 times)

evaporator

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Question for small business owners
« on: January 02, 2018, 08:51:13 PM »
I'm a small business owner (6-8 employees), and I'm considering expanding the benefits we offer employees to include health care. Currently we offer most other benefits; PTO, paid holidays, retirement plan, paid training etc.
I'd love to know how other business owners have handled phasing in an expensive benefit like health care. Did some of the other benefits or pay rates get reduced to help make the cost of health care more feasible for the company?
How did you handle employees that opted out of health coverage?
How do you handle the unexpected increases in health care costs to the company?

Any input would be great, thanks.

evaporator

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Re: Question for small business owners
« Reply #1 on: January 03, 2018, 07:00:57 PM »
Wow, surprised to see no replies.
Is there a better place on MMM to post something like this?

MJseast

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Re: Question for small business owners
« Reply #2 on: January 03, 2018, 07:05:48 PM »
Probably not the answer you're hoping for, but we just bit the bullet and did it - no phasing in, unless you count the fact that we require a certain number of hours worked to qualify and that we pay 75% and have employees pay 25%.

I'm not sure about your question re: employees who opt out. I'm not the plan administrator so maybe there's something that I don't know, but I don't think we did anything for people who opted out. I *think* they just had to sign a waiver or something, that was provided by our insurance broker or provider.

As for handling cost increases, we just make less profit. For now. The hope is that we have happier, healthier employees that will serve our customers even better and in the long run everyone wins. I hope it works out that way :).

SC93

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Re: Question for small business owners
« Reply #3 on: January 03, 2018, 09:12:32 PM »
I didn't offer it when I had employees.

As for 'healthier' employees, here is what worked for us. When someone was sick I would take them flowers and stay with them awhile.... even if they insisted that I didn't. Why on earth would I do this? Little did they realize that once they figured out I was coming over to spend a few hours and screw up their whole day, they stopped calling in sick unless they really were sick and if they really were sick, I'd only stay a minute. You can tell when someone is sick. It worked. Oh wait, my baby sitter cancelled today. That's ok, bring him/her to me and I will watch him/her. I love kids (I really do not love kids). My boyfriend took my car and got arrested for DUI and they towed my car.... no problem, I can come by and pick you up. <<< Did you know that once they figured out I had an answer to all their ailments, they rarely called in sick unless they really were sick. I never told anyone why I did these things. They thought I was too damn nice. lmao Before I started doing this, we always had to hire 'extra' people because we always had someone calling in. Once they figured out I had all the answers... we only hired 1 'extra' person.

I realize this wasn't an answer to your question but if you are having a problem with people being 'sick', give it a try. Yes, it was a pain in the ass for about 6 months but it finally straightened life out.

evaporator

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Re: Question for small business owners
« Reply #4 on: January 04, 2018, 06:19:09 PM »
Probably not the answer you're hoping for, but we just bit the bullet and did it - no phasing in, unless you count the fact that we require a certain number of hours worked to qualify and that we pay 75% and have employees pay 25%.

I'm not sure about your question re: employees who opt out. I'm not the plan administrator so maybe there's something that I don't know, but I don't think we did anything for people who opted out. I *think* they just had to sign a waiver or something, that was provided by our insurance broker or provider.

As for handling cost increases, we just make less profit. For now. The hope is that we have happier, healthier employees that will serve our customers even better and in the long run everyone wins. I hope it works out that way :).
Thanks MJseast, that does help.
Would you mind telling me how you handled the 75/25 split of the cost? Did you take their 25% directly out of payroll?

I too have the same hope; that happier employees help a business expand and in the end everyone is better off.

evaporator

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Re: Question for small business owners
« Reply #5 on: January 04, 2018, 06:21:29 PM »
I didn't offer it when I had employees.

As for 'healthier' employees, here is what worked for us. When someone was sick I would take them flowers and stay with them awhile.... even if they insisted that I didn't. Why on earth would I do this? Little did they realize that once they figured out I was coming over to spend a few hours and screw up their whole day, they stopped calling in sick unless they really were sick and if they really were sick, I'd only stay a minute. You can tell when someone is sick. It worked. Oh wait, my baby sitter cancelled today. That's ok, bring him/her to me and I will watch him/her. I love kids (I really do not love kids). My boyfriend took my car and got arrested for DUI and they towed my car.... no problem, I can come by and pick you up. <<< Did you know that once they figured out I had an answer to all their ailments, they rarely called in sick unless they really were sick. I never told anyone why I did these things. They thought I was too damn nice. lmao Before I started doing this, we always had to hire 'extra' people because we always had someone calling in. Once they figured out I had all the answers... we only hired 1 'extra' person.

I realize this wasn't an answer to your question but if you are having a problem with people being 'sick', give it a try. Yes, it was a pain in the ass for about 6 months but it finally straightened life out.
That's really great, I love it. I commend your tenacity.
We don't really have a problem with unexpected sick days, but we have difficulty recruiting really good employees that would be the top earners at our company. I think offering health coverage would help attract them.

MJseast

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Re: Question for small business owners
« Reply #6 on: January 04, 2018, 06:49:04 PM »


Thanks MJseast, that does help.
Would you mind telling me how you handled the 75/25 split of the cost? Did you take their 25% directly out of payroll?

I too have the same hope; that happier employees help a business expand and in the end everyone is better off.

Yes, it comes directly out of their paycheck and it is pre-tax.

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cchrissyy

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Re: Question for small business owners
« Reply #8 on: January 04, 2018, 09:06:16 PM »
I once bought a business only a bit bigger than that, which already provided health care to the full timers, but I fear my info is to outdated for the current climate, and I don't know anything about how the benefits program began.

I only know that yes, employee premiums were handled as payroll deductions, yes employees shared the cost of premiums (including yearly changes), and yes employees could opt out entirely. That's easy. You simply have to offer it, and it doesn't really matter who wants the coverage or not. Everybody just has to sign that they're taking the coverage or they're choosing not to, no problem. Sorry I don't recall more details.


Papa bear

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Re: Question for small business owners
« Reply #9 on: January 04, 2018, 09:57:57 PM »
Look into your local chamber of commerce to see if they offer group plans. We've been mulling over how to handle health care if necessary (my partner and I are on spouse plans and no employee has needed it yet) and found that they offered the best option over our payroll company or other HR outsourcing firms.


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KMMK

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Re: Question for small business owners
« Reply #10 on: January 04, 2018, 10:47:23 PM »
I don't know if it's the same in the US but here an easy flexible option is a health spending account. The employer picks the max they want to spend per employee, then the employees just get whatever services they want and get reimbursed. There is a company who does all the administrative work.

With regular group plans the insurance company has more rules and the employees don't get a say in how much coverage they have for each thing.

My Canadian experience anyhow.
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Fishindude

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Re: Question for small business owners
« Reply #11 on: January 05, 2018, 11:27:02 AM »
I'm a small business owner (6-8 employees), and I'm considering expanding the benefits we offer employees to include health care. Currently we offer most other benefits; PTO, paid holidays, retirement plan, paid training etc.
Good move.  It's hard to hire and retain decent help without providing health insurance.

I'd love to know how other business owners have handled phasing in an expensive benefit like health care.
You just have to purchase a good plan as economically as possible, allow for it in your budget and adjust your mark-ups to cover the cost.
Most places the employee picks up part of the cost, 25% wouldn't be out of line.

Did some of the other benefits or pay rates get reduced to help make the cost of health care more feasible for the company?
No, I think people would leave if you started taking things away.   

How did you handle employees that opted out of health coverage?
This isn't uncommon.  Many will use their spouses insurance if it is cheaper or free to them and you can't blame them.
Not having them on your company insurance means they won't be making claims, so that part is good.

How do you handle the unexpected increases in health care costs to the company?

This is something you price and shop out annually to make sure you are getting good rates.  If the price goes up, once again you simply put it in your budget and adjust mark-ups accordingly.
Having a healthy, young workforce and no tobacco users does wonders for your rates.   A wellness program can get you reduced rates also.

pianomom

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Re: Question for small business owners
« Reply #12 on: January 05, 2018, 11:56:01 AM »
I'll chime in. My husband and I own a small company with <8 people on payroll. Everyone is full-time except for me. We decided to start offering health insurance a little over a year ago. Since we're a small company, we figured we could only handle 50% of premiums (whether they're single or have a family) and the employees would have to pay the other 50%. This was still helpful to our employees who before had very expensive plans in the marketplace and they weren't able to deduct them from their payroll taxes or their other taxes.

We went through e-healthinsurance to find plans and then we had to do a bit of paperwork to set up a Section 125 plan so that they could deduct the health insurance from their payroll and federal taxes.

Our first year we did an HSA, but none of our employees took advantage of it, probably because they would have to set it up on their own. When we went to renew we found out that to do the same HSA another year we (the employer) would have to have a company HSA plan and contribute $250-$500 per quarter to each employee's HSA. We decided to do it since it was the best option for our employees and we thought it could take the sting out of them paying 50% of their premiums. Any money they add to their HSA is payroll tax deducted, and we pay the small account maintenance fee. It's easier for them to participate in an HSA this year because it's already set up for them and we're funding part of it.

Setting up the health insurance took a bit of time and you have to get the paperwork right, but I'm glad we can offer it to our employees, even if we can't offer what a Fortune 500 company could. We also try to have a good work/life balance and employees don't usually work more than 40-45 hours/week even though they're salary unless it's some big occasional project. We also offer lots of time off and a competitive salary with bonuses if the year was good.

We did have to have half of our employees sign up to be a part of the plan. Any employees who didn't sign up did so because they had better insurance through a spouse. However, we are prepared that if their spouse loses the job or insurance the employee would be eligible to jump in our plan any time of the year because losing insurance is a qualifiable event for being added to our insurance at any time.

Final note, we set up our plan in December. Psychologically I figured that plans would be cheaper the last month of the year than the first month of the next year, but I'm not sure how true that is.

evaporator

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Re: Question for small business owners
« Reply #13 on: January 06, 2018, 04:44:57 PM »
Look into your local chamber of commerce to see if they offer group plans. We've been mulling over how to handle health care if necessary (my partner and I are on spouse plans and no employee has needed it yet) and found that they offered the best option over our payroll company or other HR outsourcing firms.


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I will, thanks for the suggestion. I never thought of that.

nara

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Re: Question for small business owners
« Reply #14 on: January 07, 2018, 04:33:52 PM »
We got a small business high deductible health plan from ehealthinsurance. We did this because our business is mine and my husband's full-time job and it was about $100 mo/cheaper each to buy a business health plan than to get individual policies. We are required to offer health insurance to all employees after 90 days working 30 hours a week. We cover 50% ($128/mo) and only one of our 6 employees have opted to participate. Most of our employees are women who are either covered under their spouse's plans or are under 26 and still eligible to be under their parents' plans.

evaporator

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Re: Question for small business owners
« Reply #15 on: January 07, 2018, 05:52:09 PM »
We got a small business high deductible health plan from ehealthinsurance. We did this because our business is mine and my husband's full-time job and it was about $100 mo/cheaper each to buy a business health plan than to get individual policies. We are required to offer health insurance to all employees after 90 days working 30 hours a week. We cover 50% ($128/mo) and only one of our 6 employees have opted to participate. Most of our employees are women who are either covered under their spouse's plans or are under 26 and still eligible to be under their parents' plans.
Thanks for the information on ehealth insurance. I'll look into it.

evaporator

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Re: Question for small business owners
« Reply #16 on: January 07, 2018, 05:56:03 PM »
I'll chime in. My husband and I own a small company with <8 people on payroll. Everyone is full-time except for me. We decided to start offering health insurance a little over a year ago. Since we're a small company, we figured we could only handle 50% of premiums (whether they're single or have a family) and the employees would have to pay the other 50%. This was still helpful to our employees who before had very expensive plans in the marketplace and they weren't able to deduct them from their payroll taxes or their other taxes.

We went through e-healthinsurance to find plans and then we had to do a bit of paperwork to set up a Section 125 plan so that they could deduct the health insurance from their payroll and federal taxes.

Our first year we did an HSA, but none of our employees took advantage of it, probably because they would have to set it up on their own. When we went to renew we found out that to do the same HSA another year we (the employer) would have to have a company HSA plan and contribute $250-$500 per quarter to each employee's HSA. We decided to do it since it was the best option for our employees and we thought it could take the sting out of them paying 50% of their premiums. Any money they add to their HSA is payroll tax deducted, and we pay the small account maintenance fee. It's easier for them to participate in an HSA this year because it's already set up for them and we're funding part of it.

Setting up the health insurance took a bit of time and you have to get the paperwork right, but I'm glad we can offer it to our employees, even if we can't offer what a Fortune 500 company could. We also try to have a good work/life balance and employees don't usually work more than 40-45 hours/week even though they're salary unless it's some big occasional project. We also offer lots of time off and a competitive salary with bonuses if the year was good.

We did have to have half of our employees sign up to be a part of the plan. Any employees who didn't sign up did so because they had better insurance through a spouse. However, we are prepared that if their spouse loses the job or insurance the employee would be eligible to jump in our plan any time of the year because losing insurance is a qualifiable event for being added to our insurance at any time.

Final note, we set up our plan in December. Psychologically I figured that plans would be cheaper the last month of the year than the first month of the next year, but I'm not sure how true that is.
Thanks pianomom. I didn't think of an HSA plan, I'll look into this.

BTDretire

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Re: Question for small business owners
« Reply #17 on: January 28, 2018, 05:34:24 PM »
I haven't a clue what level your emplyees are paid at. but if the are on the ACA and you start offering Health insurance that
costs them more that what they pay after subsidy, some may not be happy. And they will no longer be eligible for the ACA.
 Just a thought.

evaporator

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Re: Question for small business owners
« Reply #18 on: January 28, 2018, 06:25:41 PM »
I haven't a clue what level your emplyees are paid at. but if the are on the ACA and you start offering Health insurance that
costs them more that what they pay after subsidy, some may not be happy. And they will no longer be eligible for the ACA.
 Just a thought.
Thanks for the input, but wouldn't they just opt out if what I offer is more expensive then what they have?
Not sure I understand the point, I'd like to. Please elaborate.

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Re: Question for small business owners
« Reply #19 on: January 29, 2018, 11:15:18 AM »
At some income levels, the ACA has great rates thanks to government subsidies.  If an employer offers insurance, employees not eligible to receive the subsidized rates.

A employer offering poor or expensive health insurance to low-paid employees is potentially doing them a disservice.