In a tough job market, health insurance may be just the convenience small business owners need to attract and retain employees. Fortunately, it has become a little more affordable in New Mexico.
“Looking at the role that health care benefits play is a key competitiveness 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-have, according to 86% of employees surveyed nationally for a 2022 MetLife study.
In addition to helping with recruitment and retention, health insurance can improve productivity. When people have insurance, they tend to prioritize preventative care, which can lead to less illness and sick leave, said Maureen Manring, director of communications and outreach at beWellnm. 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 businesses with 50 or fewer employees who buy coverage in the small group market. The program is the result of a bill passed in the state’s 2021 legislative session that created the Health Care Affordability Fund.
Employers can claim a tax deduction for the cost of health insurance premiums they have paid for their employees. In addition, employers may be eligible 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 their employees’ health insurance premiums, and purchase that insurance through beWellnm for Small Business. They can apply for 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.
On beWellnm, two similar-sounding insurance companies offer plans for small businesses. The Presbyterian Health Plan provides health management plans, known as HMOs. Preferred provider plans, called PPOS, are offered by another entity, Presbyterian Insurance Company. HMOs are plans that typically have lower premiums and a local network of doctors and other healthcare providers. PPOs provide coverage for both in-network and out-of-network providers, but premiums and disbursements may be higher.
“Small employers really want financial predictability. They’re really concerned about their bottom line,” said Brandon Fryar, president of Presbyterian Health Plan. “They want to recruit and retain. And how do you do that to get enhanced benefits, or targeted benefits, that make sense to your employees. »
The insurance company is launching a virtual health care option for small businesses in 2023. In exchange for reduced costs, employees receive a medical exam kit delivered to their homes that allows doctors to provide services to them via the Internet.
“It’s a more practical option,” Fryar said. “We know that more employees are working from home and are more used to getting services from home.”
Although not eligible for the tax credit, small business owners can exit beWellnm and find healthcare insurance from other insurance companies. New Mexico’s Blue Cross Blue Shield, for example, offers benefits for all sizes and types of employers, said Janice Torrez, president of BCBSNM.
“Many of our smaller employers also use brokers so they can evaluate multiple options for them,” Torrez said.
Weigh the benefits
While there are certainly advantages to providing health care to employees, there are also disadvantages.
“Each time you add benefits, it costs not only dollars for the cost of the program, but also the resources you need to administer the program,” Black said.
Money and time spent on insurance is money and time not spent on another part of your business.
“You weigh that against your competitive advantage of providing the edge, the healthier workforce,” Black said. “Part of what you need to understand is how to make the numbers work for you as an individual business.”
BeWellnm has certified brokers who understand small business dynamics, Manring said. They work with owners for free to find the right healthcare solution. There is also a plan comparison tool on the beWellnm website.
Ultimately, employers determine their budget and whether they want to contribute a lump sum for each employee or a percentage of the insurance premium. They choose a basic plan for their employees, but employees then select a specific level – bronze, silver, gold, or platinum – for themselves. Bronze and silver levels have lower bonuses and higher payouts while gold and platinum levels have higher bonuses but lower payouts.
With the 10% reduction in the cost of premiums, healthcare provision is more affordable for small businesses in 2023.
“It will be a great year to ensure health insurance coverage for new Mexicans,” Manring said.
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