As a new year begins, many small business owners are taking stock of their revenue and growth from 2024. If your organization has expanded, you might be wondering: Is it time to offer health benefits to my employees?
Providing healthcare coverage can feel like a daunting expense, especially for organizations just finding their footing. It’s hard to know where to start, what kind of plan is best, or whether you’re even required to offer coverage. Fortunately, the Affordable Care Act (ACA) provides clear guidelines to help employers determine if it’s time to take the next step.
In this article, we’ll explore the three key signs that your business could benefit from a Minimum Essential Coverage (MEC) plan. Whether it’s to meet ACA requirements, retain your team, or invest in their well-being, a MEC plan might be the solution you’ve been looking for.
What is a MEC plan and how does it work?
A Minimum Essential Coverage plan is a type of health insurance that provides the essential healthcare benefits required under the ACA. These healthcare plans focus on preventive services such as vaccinations, routine screenings, and wellness visits. While MEC plans don’t typically cover hospitalizations or specialist visits, they usually fulfill the ACA mandate, helping businesses avoid costly ACA penalties.
For employers, MEC plans are a practical option to meet ACA compliance requirements, especially for organizations with limited budgets.
Top 3 signs it’s time to offer a MEC plan to your employees
1. You have 50+ full-time equivalent (FTE) workers
The ACA mandates that any organization with 50 or more full-time equivalent (FTE) employees must offer health insurance to at least 95% of their full-time staff. If your company meets this FTE threshold (known as an Applicable Large Employer (ALE)) and you’re not offering coverage, you risk facing steep ACA fines.
A MEC plan can serve as a cost-effective way to provide the required health benefits under the ACA without breaking the bank. These plans are tailored to meet ACA compliance requirements and ensure you avoid fines.
Learn how to accurately track your full-time equivalent (FTE) employees!
2. You have high employee turnover and no benefits
In industries like retail, hospitality, and homecare, high employee turnover isn’t just a logistical headache—it can be a sign that your team is seeking better pay or benefits elsewhere. Losing employees to competitors who offer more attractive benefits can hurt your business in more ways than one. Frequent turnover disrupts operations, hinders growth, and can even damage your company’s reputation, making it harder to attract new talent.
If you’re seeing employees leave left and right, it may be time to reassess your benefits package. Many growing organizations either rule out offering healthcare due to perceived costs or they offer health benefits that are too expensive for their employees to afford.
A creative solution is to combine a MEC plan with a Direct Primary Care (DPC) membership. By combining DPC and MEC, employers can give employees access to on-demand primary care visits, which most MEC plans don’t cover.
3. Your team is requesting benefits
In today’s competitive job market, offering attractive employee benefits can set your business apart. If your employees are requesting better healthcare options, you should listen or risk losing loyal talent.
A Minimum Essential Coverage plan combined with a DPC ensures your team has access to preventative care and primary health services, boosting employee satisfaction and retention. With DPC, employees can utilize those primary care visits when they’re not feeling their best, in lieu of going to urgent care or the emergency room, which MEC plans don’t normally cover.
The benefits of providing MEC plans to your employees
Offering a MEC plan to your employees isn’t just about avoiding ACA penalties—it’s also a powerful way to enhance your business’s ability to attract and retain top talent while controlling costs. Here are a few benefits of implementing a MEC plan for your workforce:
Boost recruitment and retention
Employees value healthcare benefits, with 89% preferring employer-provided coverage and 97% believing quality benefits are critical for retention. While MEC plans alone are a great start, combining it with another benefit that enhances the quality of care, such as DPC, can help companies on tight margins offer healthcare their employees want to use - often at a lower cost per employee than traditional health insurance.
Prevent ACA penalties
ALEs are required to provide healthcare coverage to avoid steep ACA penalties. MEC plans fulfill this requirement by covering essential services like preventive care, immunizations, and screenings. By choosing a MEC plan, you ensure ACA compliance and safeguard your business from costly fines.
Conclusion
Putting employee healthcare benefits on the back burner may no longer be an option, as organizations that fail to comply with the ACA risk audits and hefty penalties from the IRS. If your organization is showing any of the signs above, a MEC plan offers a cost-effective, compliant solution that supports both your workforce and your bottom line.
With Vitable Health, you can take your benefits package to the next level. By combining a MEC plan with DPC, Vitable ensures your employees receive comprehensive, accessible, and high-quality care. Ready to get started?
Contact Vitable Health today for a free quote and take the first step toward protecting your business and supporting your employees’ well-being.
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