If You Are A Small Business Employer

Non-discrimination rules. It is very important to note that while you can offer benefits if you choose, you need to apply the same employment rules uniformly among eligible employees. Violations of those rules would be a very serious matter.

Short-Term Disability. This is trickier than it may seem. The simple reason is that young females are relatively expensive, because pregnancy is deemed to be a “disability.” However, employees would find this very valuable, for the reasons stated earlier.

Long-Term Disability. The plus here is that underwriting is far easier when offered on a group basis, but if highly-compensated employees attempted to purchase this on an individual basis, the underwriting is far more difficult, and the premium can be far more expensive.

Employer-paid Life Insurance and Voluntary Life Insurance. The outstanding fact here is that Employer-paid life insurance is very, very inexpensive. Importantly, insurance companies will offer voluntary life insurance, where the employee is fully responsible for the premium. Voluntary life insurance is usually subject to a minimum number of enrollees. But, the underwriting on voluntary life is notably less strict than life insurance purchased on an individual basis. When coupled with the premiums, which are on par with aggressively-priced life insurance that would be purchased in the individual market, it can be valuable to the employee, especially when that employee (or the employee’s family members) may have difficulty in passing medical underwriting.

Health Insurance. Large-employer techniques to self-fund have arrived in the small business health insurance market. This can lower premiums and result in premium rebates, resulting in far lower health insurance premiums. The downside to this is that carriers are allowed to ask medical underwriting questions. For traditional small group health insurance, the results vary wildly depending on location, where the quality of plans, networks and the premiums will vary wildly. The employer is not obligated to pay, and can set its own contribution rules, which includes a fixed-dollar amount. This may be valuable to the employer, who can set their own plans regarding cost control, while simultaneously offering health insurance to employees.

It is very notable that under the ARPA (American Rescue Plan Act), the health insurance subsidy (APTC) can still be used, IF and only if the premium that the employee must pay exceeds a federal hardship level. Further, an employer may choose to not offer health insurance, but assist employees by not offering group health insurance, but offer other benefit configurations which allow employees to access the APTC, resulting in much lower premiums.

Lastly, Medicare-eligible employees should be able to access the individual Medicare market at much lower premiums, with superior benefits. The exception: the highly-paid employee, who would be subject to the IRMAA, which could sharply increase both Medicare Part B and Part D premiums.