Group Health Insurance in Colorado. What Do I Need to Know?
As small business owners, we all know the devil is in the details. When approaching a new venture or implementing a new software platform, one of the main questions always lurking on our minds is the time commitment. All too often we are told by a salesperson or marketer how simple the implementation of a product is, and rarely, if ever, is it as simple as they say. So. In this article, I will outline a few items that you will want to know about that will come up when you implement group health insurance for your business in Colorado.
1.) You will need a section 125 cafeteria plan. This is a document that is required by the IRS in order to provide your employees with group health insurance. Some major carriers will include this for you in their plan. It is known as a P.O.P. or premium-only plan service and it applies only to standard premium or affordable care act plans. This allows the insurance company to put you under a Section 125 blanket policy that costs you no additional time or effort. Some carriers do not offer this service. However, many CPAs and payroll services are familiar with Section 125 plans and for a fee, they can generate one for your business. Benefits 4Business also offers this service to those that need it.
It is not a form that you file with the IRS but rather a resource document that you must keep on hand because it outlines the specifics of your group health plan details, such as the percentage your company pays toward employee premiums, what time of year your health insurance renewal is, etc. It is not an expensive or time-consuming component but is required and knowing it is something you will need ahead of time is helpful.
2.) The Consolidated Appropriations Act was enacted in 2021. Most of the policies contained therein are regarding making sure the healthcare system provides greater transparency in its pricing, especially before a procedure. The one ordinance that is required of businesses regarding the CAA is Section 204 Pharmacy Reporting or Prescription Drug Data Collection (RxDC). You will likely receive a brief questionnaire from your carrier in June and again in December asking you to provide information on your group plan regarding prescription drug benefits and premiums.
According to CMS.gov the C.A.A. requires insurance companies and employer-based health plans to submit information about:
Spending on prescription drugs and health care services
Prescription drugs account for the most spending
Drugs that are prescribed most frequently.
Prescription drug rebates from drug manufacturers
Premiums and cost-sharing that patients pay.
The onus is on the carrier, but they may request certain information from your business to ensure the accuracy of the information that they must provide to the Department of Health and Human Services (H.H.S.), the Department of Labor, the Department of Treasury, and the Office of Personnel Management. The data is collected to help the government better identify healthcare expenses and the factors that drive costs for premiums and Rx.
3.) I.R.S. forms will need to be filled in along with your business tax return when you provide group health insurance. The requirements are different for an A.L.E. (Applicable Large Employers) which are companies with 50 or more full-time equivalent employees than they are for small businesses with fewer than 50 full-time equivalent employees. Your C.P.A. will have the necessary knowledge to correctly complete and file the forms. If you need additional information, please visit the I.R.S., A.L.E. information page. If you would like additional information on small business tax filing requirements, please visit the I.R.S. website.
None of these requirements are time-consuming or as intimidating as they may seem at a quick glance. Your insurance carrier, insurance agent, and bookkeeper will do all the heavy lifting here. However, to avoid surprises, it is always best to educate yourself on the high-level key points of the legal requirements when you are implementing any new program in your business and know what you need to ask when talking to an agent or carrier about your group health insurance plan.