Question: I am a small business with under 40 employees who has always paid 100% of employee and family medical coverage since 1977. With the changes in healthcare coverage would it be more beneficial to me to have my employees go individually under California Coverage or would it be cheaper for me as an employer to continue cover them as a business under my current provider?
Answer: You’r right to reconsider the decision you made in 1977. Things have changed. There are so many elements to be considered that this decision lends itself to the classic Ben Franklin weighing of pros and cons. If you continue to provide a group plan with 100% coverage for your employees you get loyalty, employee good will, easier to recruit new employees, a big tax-deductible expense. On the con side a you get a huge business expense that will only continue to grow beyond your control. If you dissolve your group plan, there are many other considerations. How many of your employees will qualify for subsidies in the individual exchange. Will you provide extra compensation to “sweeten the deal” particularly with your higher-paid or key people? What are the tax consequences to your business and your employees? It’s complex and illustrates why you need a knowledgable professional insurance broker to guide and advise you.