Open enrollment season is almost over – Ready?

Open enrollment season is almost over – Ready?

Ready? When the 2015 Health Insurance open enrollment ends (Sunday February 15th), what do your employees need to know?  Similarly, what do you need to know when it comes to competing for the most qualified and talented employees?

First and foremost, if your restaurant doesn’t offer a group / employer sponsored health insurance plan, individual employees, who have not purchased health insurance will most likely be forced to go without it for the remainder of 2015.  On top of not having health insurance, un-insured employees will be subject to a tax penalty of up to 2% of their gross household income.  Their next opportunity to purchase health insurance, without a qualifying event, will be in the fall for a January 2016 start date.

With greater access to individual plans and subsidized coverage through the Washington Healthplanfinder, more and more restaurants have begun to reimburse their employees for part of their monthly premium rather than offer a traditional group plan.  Not only are these types of reimbursement programs frowned upon by the IRS, but they present the same problem when open enrollment closes.  If you hire a key employee mid-year, and that employee does not have coverage, they can’t purchase an individual health insurance plan rendering your “benefits program” unattainable and possibly discriminatory.

Even though the individual mandate of the Affordable Care Act has generated increased individual health insurance enrollment, I am seeing an uptick in single unit and small group operators offering employer sponsored health insurance in order to compete with the larger regional and national operators.  Why?

In 2016 when the Large Employer Mandate drops to 50 Full Time Equivalent (FTE) employees, most large single unit and multi-unit operators will have to offer health insurance to their full time employees. (Currently defined as 30 hours per week)  In order to retain key employees, without having to pay higher than market wages, benefits have returned to the forefront of the compensation discussion.  Smart operators are getting in now to avoid losing key employees to their competitors, take advantage of multiple tax incentives and to avoid what will prove to be a disastrous enrollment period next December.

Beyond year-round access to enrollment opportunities, group plans, such as the WRA sponsored HIHIT program, still provides some key cost controls.  The ability to “class out” allows an operator to only insure certain tiers of employees – regardless of hours worked.  Another key element of the HIHIT program allows an employer to contribute as little as 50% of the employee’s monthly premium.  Although other plans may have a slightly lower premium, a required employer contribution of 75% would prove much more expensive to the business in the long run.  Possibly the most important change to the HIHIT program is the Access PPO network.  Although the HIHIT plan is offered through Group Health, it is not solely a Group Health product.  UW, Swedish, Polyclinic and more are now IN-Network.  This more than anything else has generated increased interest in the HIHIT program.

It’s never too early to start planning.  Quotes for group plans can be generated in less than a week typically.  A simple payroll report will provide your broker with everything necessary.

Content provided by Gordon Kushnick of Essential Benefits  For more information on HIHIT and Health Care program options available for restaurants contact Gordon at 206-465-5019.

Categories: Programs