Dos and Don’ts for small business health plans

Small business health plans are subject to regulation by the Internal Revenue Service, the U.S. Department of Labor and state insurance departments. The Affordable Care Act enacted in 2010 and implemented in phases from 2010 until 2017 adds many additional health plan requirements. This post does not include references or discussion but simply lists the topics as either in a category of allowed and recommended as a best practice or potentially problematic as of the date of the most recent article update.

The post addresses small businesses with more than 1 but less than 50 common law employees. This post does not address unique circumstances pertaining to one person businesses, S-corporation shareholder employees, church plans, union employee plans, independent contractors, the requirements of federal law known as COBRA for employers with 20 or more employees and some of the requirements of HIPAA.

Also consider that small businesses are not required to offer employee health benefits. This list only pertains to employers who voluntarily opt to provide employee health benefits. The overriding advice to all employers in this subject matter is “do it right or don’t do it at all”.

Do…

– Have a plan document
– Review your plan annually
– Make sure your plan was updated recently to meet market reform requirements
– Have a Summary Plan Description available for employees
– Notify employees in writing of eligibility for employer-provided health benefits and the benefits available through the public insurance exchange
– Pay for ‘excepted benefits’ including dental, vision, accident, employee wellness and limited benefit hospitalization plans.
– Pay for employer-sponsored group health insurance
– Pay for out-of-pocket expenses that are integrated with your employer-sponsored group health insurance
– Pay for employer contributions to employees’ Health Savings Accounts
– Provide employees with a source of independent advice on health benefits

Don’t…

– Presume that your insurance policy is the health plan document
– Pay for individual major medical insurance
– Pay for insurance provided through an employee’s spouse
– Pay for out-of-pocket medical expenses that are not integrated with your group health insurance plan, governed by a qualified written plan and verified by an independent claims processor.
– Include employer-paid health benefits as taxable employee compensation
– Discriminate in either the eligibility requirements or the payment of health benefits
– Inadvertently disqualify low income or part-time workers from government-paid subsidies for health insurance
– Rely on the opinion of the product seller as to the product’s legal standing
– Rely on legal or tax guidance by firms who are primarily selling insurance products
– Assume that your insurance company takes care of your company’s heath plan compliance requirements
– Administer your own health plan claims