Obamacare…Obamacare…

It’s been over five years since the Affordable Care Act has become law, and began taking over one-sixth of the U.S. economy. Healthcare in our country will never be the same as it was prior to 2010. If you own or are employed in a business with 50-100 employees, 2016 will be very different from 2015.

Whether in name or not, the federal government now effectively controls the entire “private” health insurance market. Federal bureaucrats decided that beginning January 1, 2016, groups with 50-100 employees should be classified as small groups. All insurers must follow this dictum. For as far back as we can remember, these were considered to be large groups. Hence, if you belong to such a group, get ready for some sticker shock.

Approximately 70% of existing 50-100 groups are set to see premium increases as high as 40%-50% when they renew in 2016. The lucky 30% or so will actually do better as a small group than they did as a large group.

As a general rule, larger groups have a lower pool risk and benefit from lower premiums. On the flipside, in small groups premiums are age banded. Younger, healthier employees do not have to pay the same rate as their older colleagues, so in some cases they’d be paying less than in a larger pool.

You can’t know with certainty what 2016 rules will mean for your 50-100 group. There are a variety of factors involved. Do not waste a moment to contact a competent broker – if your broker hasn’t contacted you yet – to see how it will affect you.

Solutions?

If these changes will negatively affect you, you can still breathe one sigh of relief. It is in your hands to at least postpone the pain.

All group insurers have come up with a loophole, which has been approved by federal regulators. Even if your set renewal date is sometime in 2016, you can opt for an early renewal, toward the end of 2015. If you renew this year, your group plan designation will be “grandmothered” in – another way of saying “grandfathered” – as a large group for 2016 and avoid the steep premium increase. Next year, you will be able to renew your plan as a large group one more time. At the end of 2017, you will need to renew as a small group.

There is another thing that employers should be aware of – regardless of the size of your business. If one or more of your employees purchases insurance on their own – not as part of your company’s group plan – it may not be such a bargain. Until now, employees would often find cheap insurance on their own, sometimes on the Obamacare individual exchange, and have their employer pay all or part of their premiums directly to the insurance company. The employer would deduct these payments off the employee’s pretax gross income. Ergo, not only were the premiums a bargain, but you saved on taxes too.

Nothing lasts forever, they say.

For the most part, the IRS let people get away with this. Now, however, our favorite agency is getting ready to crack down. Such a practice can cost an employer a $100 penalty per day per employee.

In other words, it’s not a good idea to try your luck on this. You will do a lot better if you find a quality group plan for your business that is your most affordable option.

One commonly overlooked solution for employers facing various insurance predicaments applies if some or all employees are eligible for Medicaid, which has become easier under ACA guidelines. If an employee obtains coverage through Medicaid, he or she receives adequate medical care at no cost to you. An employee on Medicaid also satisfies your compliance with the Obamacare employer mandate, which, beginning in 2016, covers all businesses with over 50 full time equivalent employees.

What commonly happens, though, is that many Medicaid eligible employees are unaware that they’re eligible, or never bothered signing up. For this, we offer a great service: We can get a professional to visit your company and determine the Medicaid eligibility of each individual employee. For a low fee per employee, this professional will help eligible employees obtain Medicaid coverage.

The bottom line is that you always need to come onto a knowledgeable, helpful agent that can assess your company’s situation and come up with creative, customized solutions.

That’s where Cosmo Insurance Agency comes into the picture!

Mark Herschlag is the founder and CEO of Cosmo Insurance Agency, which is based in Ocean County. Cosmo Insurance Agency offers personalized solutions for individuals and businesses looking to obtain health, life, dental, long term care or disability insurance.

For more information or for a free, no-obligation quote, please call (201) 817-1388 or email [email protected].

By Mark Herschlag