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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Small Business Health Benefit Decisions 2014

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Question: Is it better for a business with less than 25 employees to keep current employee healthcare plan in place or cancel it before 2014?

Answer: Your question is one many small business owners will be asking in the next year or two. Do I keep providing group health insurance for my employees or turn them loose to shop for individual health insurance on the Exchange? On a strictly objective level, your answer will depend on (1) the income level your employees and (2) the employment market for your employees. Let me give two examples to illustrate - a retail store with 25 employees versus a software development firm with 25 employees. The retail store employees are mostly low-income, many of whom will qualify for premium subsidies in the Exchange. Retail employees are relatively easy to hire and train. Conversely, the employment market for software developers is very competitive, so this business would do well to keep providing a comprehensive group health plan to attract and keep the employees it needs. Employers who choose to take advantage of the Exchange’s premium subsidies to help fund their employee health benefits may still offer group health insurance to a subset of their employees. The tax consequences and health plan regulations on how that will work are yet to be determined.

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