While companies often like to provide comprehensive employee benefits for their workers in order to retain them, an increasing number of business owners are realizing that by making some strategic cuts, they can avoid certain penalties that the Patient Protection and Affordable Care Act (ACA) could bring.
According to the Wall Street Journal, many entrepreneurs are taking advantage of so-called "bare bones" health plans which include key preventive services and only a select number of other incidentals and treatments. Others are requiring their workers to put more out-of-pocket money toward copayments, depending on the services rendered by hospitals and treatment facilities.
"For certain organizations, it may be an ideal solution to minimize the cost of opting out," David Ellis, a business owner who employs 350 workers from his Arizona-based senior health facility, told the newspaper. He added that after he was presented with the possibility by insurance professionals, he ultimately decided it was the best plan of action to take based upon what cost obligations he'd have by keeping the one previously in place.
Benefit-services firms that offer these plans indicate that while these policies are quite basic, they ultimately pay off for the business owner, as they fulfill the requirements mandated by the ACA, thus preventing them from having to pay a penalty.
Major health insurers are also offering a number of other alternatives in an effort to keep business owners' insurance costs affordable. The Wall Street Journal reports that insurers are offering discounted rates for business owners that renew their plans well before their set to expire. Not only that, but early renewal may also prevent them from having to satisfy certain HR compliance statutes that will go into effect January 2014.
Meanwhile, some employers have kept their hiring activity reduced to avoid the ACA mandate. In fact, a recent Gallup poll found that one in every five owners have let current employees go in order to be classified as a small business owner.
