After dropping employee healthcare coverage because of the Affordable Care Act (ACA), many small businesses are bringing it back.
Chris McPike is the vice president of compensation programs with insurance brokerage firm ComPro.
She says employers stopped offering coverage, because they thought their workers could get it cheaper from the federal marketplace.
“So, small employers also now are returning to their core reason for trying to offer employee benefit packages in the first place – they want to be able to attract good quality employees and they want to be able to keep those employees on their staffs, and if they fail to offer an employee benefits package, that’s a difference maker,” McPike declared at a recent forum on health insurance.
Under the ACA, a small employer – one that has 50 or fewer fulltime equivalent employees – does not have to offer health insurance.
McPike says many individuals who buy health insurance without a federal subsidy are feeling the pinch.
“That can be different if the person does qualify for some help with paying for their premium,” she says, “because their income qualifies, but if you have a demographic of your employees where you are middle and upper income, most of them may not qualify.”
McPike says the rate of premium increases for individuals next year is roughly three times greater than the rate increase for group coverage.
“In history, small employers would often not offer health insurance to their employees, because they knew their employee could go get it cheaper on their own. They might bump their salary a little bit, or do something to help compensate for the lack of offering an employee benefit plan,” McPike says. “That doesn’t make sense anymore.”