Should Small Employer Continue Providing Healthcare Benefits?

dlongawa

As a small employer according to ACA (less than 50 employees) we have always offered medical, dental, life & LTD insurance to full time employees. With ACA and skyrocketing premiums making private group coverage quite unaffordable, our employer is strongly considering dropping the medical and sending our employees to the Exchange. My research reveals that dollar for dollar, the premiums are much lower through the Exchange... which beckons my question. How can we make up for the 75% the employer has always covered toward the premiums? If income is the only answer, it's more complicated than it seems. Ex: Income is taxable to the employer and employee alike; the expense of an employer group plan was not. Large HSA contribution is not the answer because you can not pay for premiums from your HSA. Are there any clever, out of the box tips? For example, can an employer reimburse for medical insurance expenses, somehow? I doubt it... ((

Carolil

I would look into the reimbursement idea. We have health plans, but we also reimburse folks up to a certain amount if they are on their spouse's plan, or have an outside nongroup plan.

dlongawa

Thank you for your response. Do you use a formula for determining the reimbursement or a flat dollar amount? Is the reimbursement , tax free? I.E., do you cut a company check and write it off as an expense instead of issuing the check through payroll?