We know Health Care Reform is a lot to wade through. And you can’t help but wonder how this will play out for your company.
Here are some key facts to help you decide whether to offer group health benefits:
Federal Tax Penalties
Check out our Financial Impacts page for a detailed breakdown of new penalties for providing—or not providing—group health care for your employees.
Hard Dollar Costs
In addition to federal tax penalties, employers who decide to drop coverage are actually subject to additional consequences, including:
- Loss of the business income tax deduction currently available for providing group health coverage
- Loss of employer FICA savings gained when employees make pre-tax premium contributions
- Increased payroll costs
Most employers provide subsidies to help cover health care costs, a real value to employees. Those who choose to drop coverage should expect to increase compensation to make up for losses in these subsidies—and to help employees with new costs incurred by loss of group health care. Use our health care cost calculator to determine what your cost could be.
If you drop your health plan, consider the following soft costs:
- Loss of positive impact on employee health and wellness
- Loss of productivity as employees deal with health coverage issues and HR time to answer questions about unfamiliar policies
- Potential conflict with in-force CBAs
- Damage to employee relations—increased turnover, negative morale, and negative impact on recruiting and retention
- Potential loss of status as the employer of choice