Reports recently released stating that the costs of health insurance costs rose quite drastically for policyholders like businesses, have left some questioning whether affordability is still available as health insurance has traditionally grown over the past years, but at a slower rate than we have seen this year. However, when it comes to employer health insurance costs, some businesses may not have been as impacted by these health insurance increases, which when it comes to small businesses, is a good sign as some of these companies often worry that they are simply not in a position to afford coverage to their workers if costs become much higher.
There are also questions surrounding small business health insurance tax credits that were supposed to help smaller companies meet the needs of their workers when it comes to offering employer group health insurance policies, as some workers are in a position where they rely on their employer for health insurance coverage due to their inability to afford personal health insurance costs or, in some cases, workers do not qualify for personal health insurance plans because of preexisting conditions. This has always been a benefit that employees see when using an employer’s group health insurance plan as coverage cannot be denied for workers when a preexisting condition is in place, but getting coverage outside of a group health insurance plan from an employer could make costs related to a personal plan much higher, if a consumer even qualifies.
It was hoped that the small business health insurance tax credit that was made available last year would alleviate the burdens that business owners have when it comes to offering health insurance and even go so far as to give more companies security when it comes to knowing that they have help when it comes to meeting these costs, and there are some business owners who even claim they have hired fewer workers simply because they did not feel they could afford the cost of offering insurance.
While the health insurance tax credit for small businesses was said to offer a credit of up to 35% of what businesses paid on health insurance premiums, some small companies have not qualified due to restrictions on the number of workers that a company has to have or the average salary each worker earns. It was argued when these restrictions were first introduced that it is only promoting businesses to keep their employee numbers under 25, which is the maximum, and offer no more than a $50,000 average annual salary, as some companies may fall just outside of one of these ranges and therefore not qualify for this credit.
However, we have seen that some businesses are altering their health insurance policy, which could mean reduced coverage, may have their workers shouldering more of the burden financially when it comes to meeting health insurance costs, or there are some companies that simply switch to high-deductible insurance plans that, once again, may require that an employee pay more out-of-pocket to meet these deductibles, despite having coverage in place that may go beyond the costs of their particular health insurance deductible.
Companies may still qualify for the small business health insurance tax credit as the credit is set to continue over the next few years, but not all businesses will find affordability for their employer group health insurance plans from this particular option. Yet, this doesn’t mean that workers must be left without coverage, as there are some alternatives, again like a high deductible plan, that may be beneficial for certain companies, and since each business owner’s employee health insurance needs will differ, it may offer more opportunities for affordability if, for example, less coverage may be needed or workers may be willing to help share the costs.