In a tough job market, health care insurance may just be a convenience small business owners need to attract and retain employees. Fortunately, it has become more affordable in New Mexico.
“Looking at the role that health care benefits play is a major competitive issue for employers,” Rob Black, president and CEO of the New Mexico Chamber of Commerce, told the Albuquerque Journal.
In fact, medical insurance is a must, according to 86% of employees surveyed nationally for the 2022 MetLife study.
In addition to helping with hiring and retention, health insurance can boost productivity. When people have insurance, they tend to prioritize preventive care, which can lead to less sickness and sick leave, said Maureen Manring, beWellnm’s director of outreach and outreach. BeWellnm is a shopping platform for health insurance plans regulated by the New Mexico Department of Insurance.
And thanks to a new program, the Small Business Health Insurance Premium Relief Initiative, premiums have been reduced by 10% for companies with 50 or fewer employees from small group market purchase coverage. The program is the result of a bill passed during the state’s 2021 legislative session that created the Healthcare Affordability Fund.
Employers can take a tax deduction for the cost of health insurance premiums they have paid to their employees. Additionally, employers may qualify for a tax credit of up to 50% of premiums paid on behalf of their employees.
To qualify for the credit, an employer must have fewer than 25 full-time equivalent employees, pay at least half of the premium costs for their employees’ health care insurance, and purchase this insurance through beWellnm for Small Business. They can claim this credit for two years. BeWellnm has a tool on its website that helps small business owners estimate the dollar amount of the tax credit.
At beWellnm, two similar insurance companies offer plans for small businesses. Presbyterian Health Plan offers health management plans, known as HMOs. Preferred Provider Plans, called PPOS, are offered by another entity, Presbyterian Insurance Company. HMOs are plans with lower premiums in general and a local network of doctors and other healthcare providers. PPOs offer coverage for on- and off-network providers, but premiums and out-of-pocket costs can increase.
“Small employers really want financial predictability. They really worry about their bottom line,” said Brandon Friar, president of Presbyterian Health. They want to recruit and retain. And how you do that is the enhanced benefits, or targeted benefits, that make sense for your employees. “.
The insurance company is launching a virtual healthcare option for small businesses in 2023. In exchange for lower costs, employees receive a medical check-up kit in their homes allowing doctors to provide services to them online.
“It’s a more convenient option,” Friar said. “We know that more employees are working from home, and they are more accustomed to getting services at home.”
Although they will not qualify for the tax credit, small business owners can exit beWellnm and find health care insurance from other insurance companies. Blue Cross Blue Shield of New Mexico, for example, offers benefits for all sizes and types of employers, said Janis Torres, president of BCBSNM.
“Many of our small employers use intermediaries so they can evaluate multiple options for them,” Torres said.
While there are certainly pros to providing healthcare to employees, there are also cons.
“Anytime you add benefits, the program costs not just dollars, but the resources you need to administer the program,” Black said.
The money and time devoted to insurance is the money and time that does not go toward another part of your business.
“You weigh that against your competitive advantage in providing the benefit, a healthier workforce,” Black said. “Part of what you need to know is how to make the numbers work in your favor as an individual company.”
Manring said BeWellnm has certified brokers who understand the dynamics of small businesses. They work with the owners free of charge to find the right healthcare solution. There is also a plan comparison tool on beWellnm’s website.
Ultimately, employers determine their budget and whether they want to contribute a fixed amount per employee or a percentage of the premium. They choose a basic plan for their employees, but employees then choose a specific level—bronze, silver, gold, or platinum—for themselves. Bronze and Silver levels have lower premiums and higher out-of-pocket costs, while Gold and Platinum levels have higher premiums but lower petty cash.
With premium costs reduced by 10%, healthcare delivery will become more affordable for small businesses in 2023.
“It will be a great year to secure health insurance coverage for New Mexicans,” Manring said.