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Every Small Business Is Unique. So Are Their Health Insurance Needs.

As we rapidly approach the last quarter of 2021, many Colorado Springs small business owners are developing budgets and business plans for next year, including whether they can afford to offer health insurance benefits to their employees.  We are here to help with our Colorado small business guide to Obamacare in 2022. 

Although the Affordable Care Act (the official name of what we often call “Obamacare”) does not require businesses with less than 50 full-time employees to offer coverage to their workforce, many Southern Colorado small business owners do so anyway. That’s because of the many financial and intangible benefits of doing so. 

For instance, providing employees with health insurance as part of a comprehensive benefits package will attract better talent, reduce turnover, increase employee satisfaction, and improve productivity. But it also comes with equally valuable financial incentives designed to encourage more small businesses to enroll in Obamacare. 

As companies in Colorado and across the country emerge from the long and difficult ordeal of the COVID-19 pandemic, business owners are looking to the future with hope and optimism. If your business plans for fiscal 2022 include offering group health insurance to your employees, working with an experienced Colorado group health insurance broker is the best way to navigate the process and learn about your options.  To get you started, here is our small business guide to Obamacare.

Small Business Guide to Obamacare: The Basics

When a Colorado Springs employer offers ACA-compliant health insurance coverage to employees, it usually does so through group health insurance plans. In Colorado, carriers such as Anthem, Humana, UnitedHealthcare, Aetna, Kaiser Permanente, and other providers offer multiple plan options specifically tailored to the needs and budgets of Colorado small businesses. 

Here’s how the process typically works. Your company will sign up and purchase a health insurance policy from a carrier for the “group,” which consists of your employees and their dependents. Your company may opt to provide health insurance to full-time employees only or include coverage for part-time employees as well. 

After enrolling in a group plan, your company will typically pay the full fee for the plan to the health insurance company while also deducting contributions from the paychecks of employees who participate in the program.

Companies who provide group health insurance options to employees must offer it to all eligible employees when they become eligible for such coverage. The group health insurance policy will stipulate what qualifies as an eligible employee. Additionally, you must provide each employee with a standard “Summary of Benefits and Coverage” (SBC) form that explains the benefits your plan offers and what it costs to participate in the plan. 

Further Reading: How Does it Work When a Colorado Employer Provides Health Insurance Coverage?

Small Business Health Options Program

Obamacare established a program designed specifically to make it easier and more affordable for smaller businesses to provide health coverage to their employees even though the law may not require them to do so. 

Small employers (generally those with 1-50 employees) may be able to enroll in Small Business Health Options Program (SHOP) plans through an insurance company or with the assistance of a SHOP-registered agent or broker like Preferred Insurance.

If your company is eligible for a SHOP plan, you can generally enroll in a plan at any time (that is, you do not have to wait until the open-enrollment period applicable to individual insurance plans bought through Colorado’s Health Insurance Marketplace). However, to be eligible to enroll in health insurance coverage through SHOP, your small business must:

  • Have a primary business address in the same state where you’re purchasing coverage;
  • Have at least one employee enrolling in health insurance coverage who is not the business owner, business partner, or spouse of an owner or partner;
  • Have from 1 to 50 full-time equivalent (FTE) employees; and
  • Offer SHOP coverage to all full-time employees.

Small Business Guide To Obamacare - Tax CreditsSmall Business Health Care Tax Credit

Southern Colorado small businesses that offer their employees group coverage through a SHOP plan can get tax credits of up to 50 percent of the premium expenses they incur during any two-year period. Under IRS rules, a business can generally claim the small business health care tax credit if it offers a health plan through SHOP and :

  • Has fewer than 25 full-time equivalent employees;
  • Pays average wages of less than $50,000 a year per full-time equivalent employee (indexed every year for inflation);
  • Covers at least 50 percent of the cost of employee-only health care coverage for each employee.

In addition to the Small Business Health Care Tax Credit, small business owners who offer healthcare to their employees can deduct 100 percent of all health insurance-related expenses that your company pays as ordinary business expenses under both federal and state law.

Small Businesses Throughout Colorado Turn to Preferred Insurance For Their Health Insurance Needs

We hope that this Colorado small business guide to Obamacare in 2022 provided you with helpful information. But between finding the right plan, calculating costs to your business and employees, not to mention ensuring employees are provided with the required paperwork so that you are ACA-compliant, we know that navigating group health insurance can be confusing, especially when you are a busy small business owner.  At Preferred Insurance, our experienced Colorado Springs small business health insurance brokers work hand-in-hand with companies and organizations throughout Colorado to develop and implement group health insurance programs that keep their employees and their bottom lines healthy. Our knowledgeable and accessible independent brokers will answer all your questions and provide solutions best suited to your company’s needs. We are locally owned and operated and provide free quotes in less than 48 hours.

Call Preferred Insurance today to schedule a free group health insurance consultation and to discuss your small business health insurance costs.