Seemingly as the ink was still drying on the Affordable Care Act, congressmen were scrambling to organize their objections to the bill and businesspeople from around the country were wringing their hands, anticipating the coming years of uncertainty.

Would Franchise Owners now have to provide group health insurance coverage for their employees? If so, what kinds of plans would qualify as acceptable under federal law and would there be any subsidies? In what ways could offering health insurance be an asset or a detriment to your franchise growth?

It turns out that the Affordable Care Act’s employer mandate is now in full swing. So, what are the implications of this for franchise owners?

Health Insurance Options for Franchise Owners

If you’re reading this in 2016, that’s actually an advantage in itself. For years after the Affordable Care Act slipped through Congress, there was tremendous uncertainty about the kinds of coverage franchise owners would need to provide to their employee bases, and whether they would be required to do so.

So, what’s the deal? Well, the Affordable Care Act actually treats franchise owners as operating discrete enterprises under the ACA’s common ownership rule.

This means that franchise owners overseeing one or multiple locations and employing 50 or fewer full-time staff won’t have to provide any kind of group coverage, but franchise owners hiring 50 or more full-time staff will have to do so or face a penalty.

In addition to a penalty of potentially $3,000 per uninsured worker going against franchise owners overseeing 50 or more full-time staff who skimp on group health insurance coverage for their employees, there’s also the potential for an IRS audit. Yikes!

Solution: An Employer-Sponsored Plan

Employer-sponsored health insurance plans — also known as group health insurance — currently cover three out of five Americans who have health insurance.

Franchise owners who offer these plans to their staff might automatically become a more attractive employment option for a few reasons. First, employer-sponsored plans involve the employer — in this case, the franchise owner — being responsible for a large share of an employee’s health care expenses.

With subsidies, this is actually a lot less expensive than it might sound at first blush — and considering the fact that the ACA prevents insurance providers from dropping people for pre-existing conditions and sets caps on deductibles, you could gain an advantage with applicants simply by signing on with group coverage.

Group Policies are Typically Guaranteed Issue

From an employee perspective, employer-sponsored plans are also attractive because these plans are what’s known as guaranteed issue policies, which means that an employee is basically guaranteed coverage irrespective of his or her income bracket, health status or age.

Another advantage of a franchise owner offering a guaranteed issue policy to employees as part of group coverage is that these policies often offer employees a number of PPO and HMO plans that cover things like dental care, eye care and possibly even long-term disability.

For certain staff, offering group plans that also feature life insurance might be an added perk and reason to come over to your corner. Group health insurance plans that have guaranteed issue policies stay in effect as long as the franchise owner keeps paying the group premium.

HMO or PPO: What’s the Difference?

In essence, the difference is choice of doctors (greater with PPO), the need for a primary care physician’s advice (necessary with HMO) and whether you need a referral or not (yes for HMO).

Because PPO policies allow your employees to go in or out of network for care, these might be viewed as more enticing options and, therefore, make joining your franchise that much more appealing!

Interested in learning more? Then visit our website today!

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