FAQs for Small Business Owners

How can I determine if my business qualifies to enroll employees in Vermont Health Connect qualified health plans?

For the purposes of qualifying to use Vermont Health Connect 2015 plans (direct-enrolling through carriers), a business is a small business if it employs between one and 50 full-time employees. An employee is a full-time employee if he or she works 30 or more hours per week. Anyone who works less than 30 hours per week is not counted.  Also, a business may still qualify if its workforce exceeds 50 full-time employees for 120 days or less during the calendar year if the additional employees are seasonal workers.

Beginning in 2016, businesses with up to 100 employees may qualify to offer coverage through Vermont Health Connect.

My business qualifies as a small business. Should I offer coverage to my employees?

In recent years, fewer than half of Vermont small businesses offered health insurance to their employees. For those businesses that do provide insurance, the question of whether to continue to do so or to send your employees to Vermont Health Connect is a critical one. Unfortunately, there is not a one-size-fits-all answer. Vermont Health Connect offers tools such as the Small Employer Estimator to help you decide whether your business should renew its group coverage. Assisters such as Navigators and registered brokers are also available to answer your questions.   Find an Assister at http://info.healthconnect.vermont.gov/find. If your small business does not currently offer insurance, you are welcome to use Vermont Health Connect’s decision tools and Assisters to decide whether to start providing insurance.

What other questions should I ask as I decide whether to keep or drop coverage?

Here are some questions for an employer to consider:

  • Do you offer insurance today?
  • How much do you spend today on health insurance?
  • How much do your employees spend on health insurance today?
  • Would your employees qualify for premium tax credits and, if so, would they be better off purchasing insurance through Vermont Health Connect on their own rather than through your business?
  • Would you be subject to the federal penalty? Cost?
  • Would you be subject to a state assessment? Cost?

Vermont Health Connect’s Small Employer Estimator can help you answer these questions.

What types of businesses do you expect to continue offering health insurance? What types are likely to drop?

Here’s an example: A village market staffed by lower and middle-income employees (e.g., up to 400% of federal poverty level, or household income of $95,400 for a family of four) might consider dropping coverage in order to allow the employees to take advantage of federal tax credits.

A law firm with high-salaried law partners, on the other hand, might decide to continue their employer-sponsored insurance.

Businesses with a mix of incomes will have a tougher decision, as will those businesses whose employees have a wide range of household income beyond what they earn on this job. These businesses will likely want to consult Vermont Health Connect’s decision tools, such as the Small Employer Estimator, or have an Assister – either a certified Navigator or registered broker -- walk through the process of deciding what is best for each of their particular situations.

If I decide to offer health coverage, is there a minimum contribution that I am required to make?

In Vermont, there is no minimum employer contribution requirement.  However, in order to receive the federal small business tax credit, the employer must pay at least 50% of an employee’s premium. In this case, the employer is billed by the carrier and the employer collects the premium contributions from the employees and pays the insurance carrier in one payment. In addition, business owners will want to consider the impact on their employees since an offer of employer sponsored insurance could prevent an employee from receiving the individual premium tax credits that they could otherwise qualify for through Vermont Health Connect. 

Do I have to contribute to my employee’s premium costs? 

Employers can decide the amount they can contribute toward the premium cost of each coverage tier.  However, under the Affordable Care Act, an employer could incur a penalty if the coverage they offer is not affordable or does not meet certain health benefit standards.  Employer-sponsored health coverage is considered “unaffordable” if the employee's premium (self-only/Single minus the employer contribution) is more than 9.56% of the employee’s household income. The lowest cost Single premium available to the employee is used when making this calculation.  If the employer plan is “unaffordable” using this definition, the employee can purchase a plan through Vermont Health Connect with financial help, and the employer could be subject to the federal employer assessment (See next frequently asked question below to learn more).

What happens if my business decides not to offer health coverage to my employees?

Depending on the size of your business, you might be subject to an assessment by the State of Vermont, a federal assessment (beginning in 2015) or both. If your business has fewer than 50 full-time employees (“FTEs”), then you will not be obligated to pay a federal assessment if you choose not to offer health coverage. Like larger businesses, however, you will still be required to pay a Vermont assessment for each uncovered full time employee, just as you did in past years – although there is no penalty for the first four uncovered full time employees.

Click here to visit the Department of Labor and learn more about employer health care contribution information.

Because many Vermont small businesses are accustomed to contributing hundreds of dollars per employee per month toward the cost of health care, the decision to drop coverage might leave you with considerably more money on your balance sheet. That, in turn, will lead to more choices: Do you increase employee compensation? If so, do you do so in the form of bonuses or other perks? These decisions will vary from employer to employer based on their particular circumstances so we recommend you reach out to your tax professional.

Federal employer responsibility: The federal government is phasing in the large employer assessment.  In 2015, businesses with 100 or more full-time employees will be subject to a federal assessment for not offering adequate coverage to 70% of their full time employees. In 2016, businesses with 50 or more FTEs will be subject to the penalty for not offering adequate coverage to 95% of full time employees. You can learn more about the federal assessment for large businesses by visiting the Internal Revenue Service (IRS) website, by clicking here.

It is important to note that whether an employer is subject to this assessment depends on the number of its full time employees, as defined by the IRS. This is not the same as determining if your business qualifies as a small business in Vermont. For example, a business that employs 40 full-time workers and 40 half-time workers would be considered a small business for the purpose of qualifying to use Vermont Health Connect. However, it might not be considered a small business for the purposes of avoiding the federal assessment. If you are unsure how to count your employees, you can click on the IRS link which will be able to help you answer your questions or consult an attorney.

What happens to my employees if I decide not to offer health coverage?

If you decide not to offer health coverage, your employees and their families will be able to purchase coverage through Vermont Health Connect.  If they need assistance, they can use our Vermont-based call center or get in touch with an Assister in your area. Employees in most Vermont households that use Vermont Health Connect and have incomes up to 400% of the Federal Poverty Level ($95,400 for a family of four for the 2015 plan year) will qualify for financial help to pay for their monthly premiums and/or out-of-pocket costs.  These two forms of financial help are not available with employer-sponsored plans.

If you have further questions, you can call Vermont Health Connect’s Call Center for more information at 1-855-899-9600.

If a business does not offer health insurance and its employees buy health plans through Vermont Health Connect, can the business still contribute to a Health Savings Account (HSA)?

Yes. Both Blue Cross Blue Shield of Vermont and MVP Health Care offer high deductible health plans through Vermont Health Connect that may be paired with Health Savings Accounts (HSA). For more details on tax favored accounts, please refer to your broker or a tax professional if you have further questions.

What if my business has sites or employees in multiple states?

You have choices.  If your principal place of business is in Vermont (your home office), you can choose to offer coverage through Vermont Health Connect regardless of where an employee resides.  Or you can choose to provide coverage through Vermont Health Connect for those employees who are principally employed in Vermont, and through another state’s small business insurance marketplace for employees based elsewhere. 

In determining whether you are a small employer, count all full-time employees regardless of their worksite.

What if my business expands during the year to have more than 50 full time employees?

You can continue to provide coverage through Vermont Health Connect.  A qualified employer that is no longer a small employer solely because of an increase in the number of employees will still be treated as a qualified employer until it otherwise fails to meet eligibility criteria (e.g., business and all employees’ moves out of state) or elects to no longer purchase coverage through Vermont Health Connect.

Do I have to offer coverage to my employees’ families?

No, it is not required. During the annual employer election period (open enrollment), employers can decide whether to offer coverage to their employees’ dependents.

When will my payments be due each month?

Since enrollment in qualified health plans is currently taking place directly through health insurance carriers, please contact them for billing and enrollment timelines. As the employer, you will be billed by the insurance carrier and you subsequently will be collecting your employees’ premium payments. You will then pay the bill by sending in one payment.

Which plans can I offer my employees through Vermont Health Connect?

Beginning in 2015, employee choice will be available.  That means an employer may allow its qualified employees to select any small group qualified health plan (QHP) offered by the insurance company of the employer's choice (either BCBSVT or MVP) that is working with Vermont Health Connect.  An employer can also choose to offer dental coverage.

Employers can choose to offer qualified health plans from multiple carriers, but they would have to administer this themselves until the Vermont Health Connect small employer marketplace is up and running. In other words, you will receive one bill from each carrier. There is no comprehensive bill that is submitted for multiple carriers to the employer.

When are the best times to call the carriers?

While enrollment is taking place directly through insurance carriers, employers may continue to offer employees a narrower selection of QHPs, but we encourage employers to offer full choice within a carrier.  When Vermont Health Connect administers the marketplace, full choice of QHPs or full choice within a carrier will be required. For more information about small business health care options you can contact the Customer Support Center at 855-899-9600. 

To contact the carrier’s directly and discuss your options, please see the contact information below along with the carrier’s hours of operation:

Carrier

Customer Support Phone Line

Hours of Operation

Blue Cross Blue Shield

(800) 255-4550

7:00am – 6:00pm

MVP Health Care

(800) 825-5687

8:00am – 8:00pm

Sat: 8:00am – 4:00pm

Northeast Delta Dental

(800) 832-5700

8:00am – 4:45pm