Under the Affordable Care Act, business entities with at least 50 full-time employees have the legal obligation to make health coverage available to their workers. While smaller companies do not have the same responsibility of offering health insurance for employees, having a competitive benefits package is beneficial for the business too. It is an effective strategy to recruit and retain talented employees. It also shows your workers that the company cares for their well-being.

However, the cost of annual premiums for employer-sponsored health coverage can be expensive. In 2020, it reached $21,342.   

Not all companies have large budgets like big corporations. Smaller businesses may have a harder time balancing their expenses with other obligations.

The best way to keep business costs in check is for the company to follow the best practices. Here are some things to keep in mind:

Proper Documentation

You have to document everything. Keep papers that can prove that you offer health benefits to eligible employees. In most cases, companies set an eligibility enrollment period. For example, a new recruit will qualify for an employer-sponsored health plan after 30 days in the company. Do not forget to ask employees to sign documents indicating whether they waived or accepted by the enrollment deadline.

If there are deductions from employees’ paychecks for premiums, make sure you also have the necessary documents. One of these is a salary reduction agreement signed by the employee.

Consistent Administrative Process

Creating an administrative process is necessary. Having established steps that employees need to follow will help prevent any misunderstandings or mistakes. Document the steps as enrollees go through them.

You can create templates for documents that will serve as proof of the agreement. Make sure you are ready for different scenarios. For example, what steps should a new enrollee take? What about those who are up for renewal?

Set a timeframe for each step and clarify deadlines for submissions. Some HR teams use some software that will send alerts regarding deadlines, updates, and notices to make sure everyone knows of their responsibilities. 

Clear Communication

Always keep your employees updated about the company’s benefits package plan. If the company decides to make changes to its plan designs, notify the employees about it. However, do not simply post an announcement. Let them know the reasons behind the changes. Additionally, you should make sure everyone is aware of the rights associated with health insurance for employees.


Another way for business entities to save money without having to remove health insurance for employees is turning to self-funding. With this, the employer will assume the financial risks for providing health coverage. Instead of paying a pre-determined premium, the company will pay for claims as they are presented.

If you want to know more about self-funding insurance for your company, contact National Insurance Partners Inc.Talk to our team, and discuss your company’s needs. We will do our best to help you offer a competitive benefits package for your employees.

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