Ashley Poynter
Ashley Poynter

What do I need to know about Open Enrollment?

Updated:
November 23, 2020

If you are considering purchasing individual market coverage for the 2021 year, open enrollment will start on November 1, 2020 and end on December 15, 2020. This window applies to almost all states, though some have extended open enrollment windows.

As of right now, it appears that rate increases for 2021 are slated to be modest. These rate filings are available through state agency websites as state agencies or the federal government must approve proposed rates from insurers each year. As an example, Blue Cross Blue Shield of Texas will increase rates for Texas plans by just 2.97% for individuals and 5.35% for small group plans.

These modest rate increases will be a welcome reprieve for individuals and families who are still experiencing the economic effects of the Covid-19 pandemic.

Small business open enrollment

As a small business owner, you have several different options to offer your employees. Some employers choose to offer Health Reimbursement Arrangements (HRAs), where they reimburse employees for out-of-pocket medical expenses and/or health insurance premiums. You may also choose to offer a small group health insurance plan.

When shopping for small group health insurance plans, it’s important to consider how much you are willing to contribute to the plans and how much your employees will be responsible for. Employers should also be sure to avoid plans that may end up being too expensive for employees to actually use.

The Affordable Care Act (ACA) has an employer mandate that has tier 1 and tier 2 obligations. Tier 1 obligations include offering “minimum essential coverage” to at least 95% of full-time employees (and their children through age 26). Tier 2 is satisfied by offering coverage that is considered affordable. For coverage to be considered “affordable,” it must not cost the employee more than  9.78% of household income in 2020 and that threshold will increase to 9.83% for 2021. Employers that do not abide by these mandates face penalties.

How SHOP coverage works

Small businesses can apply for coverage through the Small Business Health Options Program (SHOP) under the ACA. This can be done alone or with the help of a broker to compare price and coverage options.

The SHOP Marketplace is open to employers that have 50 or fewer full-time employees. When you purchase coverage through SHOP, there are several benefits:

  • Employers can compare health plans directly online to make the best decision for your unique business
  • You have control over the type of coverage you offer and how much you contribute toward employee premiums. This includes
  • Offering your employees one or multiple plans
  • Offering health coverage, dental coverage, or both
  • Determining whether to offer coverage to dependents
  • Determining enrollment periods for new employees (waiting periods cannot exceed 90 days)
  • Small business health care tax credits may be available to help cover premium costs. You may qualify for the Small Business Health Care Tax Credit if you have fewer than 25 full-time equivalent (FTE) employees making an average of about $50,000 or less.
  • Premium costs that aren’t covered by tax credits can still be deducted from taxes.

It’s also worth noting that employees might be able to enroll in SHOP coverage outside of the open enrollment period if they qualify for a Special Enrollment Period due to a life change. This includes things like getting married, getting divorced, having a baby, or moving.

Decent cares about small business

Decent understands the importance of health coverage for small businesses and their employees. Just one unplanned medical issue can lead to serious financial hardship for people who don’t have health insurance. This is one reason why top talent is attracted to businesses that offer affordable, comprehensive health insurance. Not only can good coverage protect your employees, but it can safeguard the future of your small business for years to come.

Decent enables small business owners and entrepreneurs to band together to purchase healthcare to achieve some of the same advantages previously only available to large corporations. Decent groups small businesses of similar categories, starting with technology. If you run a technology company or a company that services technology companies, we have plans for you. That’s the good news. The great news is that these plans are up to 40 percent lower than currently available options. Exciting, right? Get your free quote today!