Who Cares About Your Workers’ Health?

Maybe a health plan just won’t work for your business, but that doesn’t mean you can’t help employees with their costs.

You’ve followed the news. You’ve looked at all your options. You know your employees would love it if you could include a health insurance plan in their benefits package.

If you employ 50 or more full-time workers, it isn’t just a nice thing to do — it’s the law. Companies that size or larger are required to provide employees with health insurance under the Affordable Care Act. And despite continued wrangling over it in Congress and in the courts, the ACA now looks to be solidly established as the law of the land.

But chances are — like most cleaning companies — you’re smaller than that, so you don’t have to offer health care benefits.

While there are ways small enterprises like yours can provide health insurance for workers, we know that even where there is a way, there isn’t always a will. Tight cash flow or the overwhelming tasks and headaches of implementing a plan can easily be roadblocks too difficult to navigate amid all your other responsibilities, running your business and helping it to gain solid footing. Since the ACA doesn’t require you to act, why not just shrug and move on?

After all, the law puts the responsibility for getting insurance on your employees as individuals — not you and your business. And it even has the mechanisms to help them — the health insurance exchanges operating in every state. So, end of story, right?

Well, maybe not. Doing something for employees when it comes to health care can serve your best interest and even boost your bottom line. A healthier workforce is more productive, and satisfied workers reduce the expenses of turnover. In one survey of employers, the Society for Human Resource Management found that in 2014 it cost on average $3,337 to hire a new employee.

So what qualifies as “doing something?”

Proceed with caution

Some employers, knowing their employees now have to buy their own health insurance, might decide to help by reimbursing them for that monthly premium cost.

Warning: That can be a minefield. But it’s not a dead end.

Many experts will tell you that you flatly cannot reimburse employees for health insurance they’re required to buy under the federal law. They point out accurately that one wrong step could expose you to tens of thousands of dollars in penalties for every employee.

But the real answer is more complicated. If you follow some strict rules, you can help out in certain limited ways:

  • Raise everyone’s pay. You could, for example, simply give a salary bump to everyone that could help them offset those premium costs.

But … the added money cannot be earmarked or restricted in any way. It’s just a pay raise, and you cannot classify it as a health premium reimbursement, nor require that employees spend it only for that purpose.  

If workers decide it’s better to put the extra cash in a child’s college fund, spend it on a fishing boat, give it to the church, go to the casino once a month, or simply sock it away in the bank — well, that’s entirely their right and outside your control.

Looking for a more targeted approach?

  • Set up a Section 105 Health Reimbursement Plan. Section 105 plans are accounts under the federal tax code that enable employers to fund individual health insurance for employees. Strict rules govern how to set up and operate them; you must follow them to the letter.

If they do it right, however, employers under the 50-employee floor of the ACA can use a Section 105 plan to fund some or all of the premiums employees pay for their individual, ACA-mandated health plans.

Additional alternatives

Short of a full-blown benefits plan or the admittedly complex Section 105, what can you do? More than you might think, says Julie Stich, research director for the International Foundation of Employee Benefit Plans based in Brookfield, Wisconsin.
Group coverage. One option is to give employees access to group rates for various kinds of voluntary benefits. Employees still pay, she explains, but “this arrangement means employees pay a lower premium rate than they would typically get on their own.”

Health, dental and vision insurance plans may all be accessible through these kinds of mechanisms. (So can other benefits: life insurance, disability insurance, long-term care insurance and more.)

Employee assistance plans. EAPs were originally created to help workers with alcohol or drug problems. Now they do much more.

“EAPs no longer focus only on substance abuse,” says Stich. “They will help with mental health issues, financial distress, stress, legal issues, domestic violence, divorce, issues with children or elders — including caregiving. EAPs will also send speakers to the workplace for education sessions.”

More options

  • Access to a nurse help line is yet another potential, and lower-cost, benefit. This is a perk many full insurance plans provide, Stich notes; you might be able to arrange it as a stand-alone service under a contract with a health care company that provides it.
  • Prescription drug, dental care and vision service discount cards are available from some providers; check with the provider to confirm specific discounts and other rules of usage.
  • Flu shots are another low-cost benefit with a high potential return. Some employers reimburse employees for shots obtained at the doctor’s office or through a designated provider, and others may bring health professionals in to give the shots right there in the office or shop.
  • Similarly, Stich says, employers can reimburse certain health screening procedures, or once again bring the provider of the screening service into the workplace.
  • Finally, various fitness options also provide at least limited-benefit opportunities — payment, subsidies or discounts for gym memberships; on-site exercise and fitness classes; other on-site services such as massage; and providing free, reimbursed or subsidized devices — like the Fitbit — that allow workers to track their own health behaviors.

So if you want to help your employees’ health, but just don’t see a way to provide a full health benefit plan, take a look at some of these other approaches. One or more just might be the ticket to meeting your workers’ needs while keeping your own budget under control.


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