Many small businesses look to make their employees' lives a bit easier by providing free or low-cost health insurance, but unfortunately, it's becoming increasingly common for business owners to lack clarity on the regulations governing healthcare, especially now as the Affordable Care Act has overhauled the way companies insure their employees.
A new survey by eHealth reveals the specifics – the company surveyed 259 small businesses, each with fewer than 50 employees, and found that a majority of them incorrectly believe the government requires them to provide health insurance for employees in 2014. These businesses are under the impression that if they don't provide healthcare, they will face tax penalties in the spring of 2015.
Many misunderstandings are regarding health insurance exchanges, or government-regulated health care plans. According to eHealth's survey data, only 18 percent of small employers are confident they know what an exchange is, while 20 percent say they have only a vague understanding and 62 percent admit to not understanding exchanges at all. Exchanges are slated to come online in October 2013 and would make subsidized health insurance available for many low-income workers, but a majority of employers haven't yet grasped the basics.
This is not to say that employers don't care about insuring their workers. On the contrary – recent data suggests that they're encouraging it. According to Aon Hewitt survey data, 83 percent of American businesses are offering incentives to employees who participate in healthcare awareness programs. Of those who incentivize enrollment, 79 percent offer rewards, 5 percent threaten consequences for not enrolling and 19 percent use a mix of both. Almost two-thirds of employers offer monetary rewards between $50 and $500.
"Employers recognize the first step in getting people on a path to good health is providing employees and their families with the opportunity to become informed and educated about their health risks and the modifiable behaviors that cause those risks," said Jim Winkler, chief innovation officer for health and benefits at Aon Hewitt. "Motivating people to participate through the use of incentives is a best practice in the industry, and these strategies will continue to be a critical part of employers' health care strategies in the future."
Awareness is key for employers and employees alike. Paying for health insurance is one of the most important aspects of business banking, and everyone could benefit from more education on the matter.