In a tough job market, health care insurance may be just the comfort small business owners need to attract and retain employees. Luckily, it got a little more affordable in New Mexico.
“Looking at the role health care benefits play is a key competitive issue for employers,” Rob Black, president and CEO of the New Mexico Chamber of Commerce, told the Albuquerque Journal.
According to the 2022 MetLife survey, 86% of workers nationwide say health insurance is a must.
In addition to helping with recruiting and retention, health care insurance can also boost productivity. When people have insurance, they tend to prioritize preventive care, which can lead to illness and downtime, said Maureen Manning, Bewell’s director of communications and distribution. BeWellnm is a shopping platform for health insurance plans regulated by the New Mexico Division of Insurance.
And thanks to a new program, the Small Business Health Insurance Premium Relief Initiative, premiums are reduced by 10% for those with 50 employees or less purchasing coverage in the small group market. The program is the result of legislation passed in the state’s 2021 legislative session that created the Health Care Affordability Fund.
Tax benefits
Employers can take a tax deduction for the cost of health insurance premiums they pay for their employees. In addition, employers may qualify 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 the cost of premiums for their employees’ health care insurance, and purchase that insurance through Wellcome Small Business. You can claim this credit for two years. BeWellnm has a tool on its website to help small business owners estimate the dollar amount of the tax credit.
Suppliers
At beWellnm, two similar-sounding insurance carriers offer plans for small businesses. Presbyterian Health Plan offers health management plans known as HMOs. Preferred provider plans, called PPOS, are offered by another entity, Presbyterian Insurance Company. HMOs are generally plans with low premiums and a network of doctors and other health care providers. PPOs offer coverage for in-network and out-of-network providers, but premiums and out-of-pocket costs can be high.
“Small employers need financial projections. They’re really concerned about the bottom line,” said Presbyterian Health Plan President Brandon Fryar.
The insurance carrier is launching a virtual healthcare option for small businesses in 2023. In exchange for lower costs, employees receive home medical diagnostic kits that allow doctors to provide services via the Internet.
“It’s a more convenient option,” Fryar said. “We know more workers are working from home, and they’re used to having services at home.”
Although not eligible for tax credits, small business owners can go outside of beWellnm and get health care insurance from other insurance providers. Blue Cross Blue Shield of New Mexico, for example, offers benefits to all sizes and types of employers, said BCBSNM President Janice Torrez.
“Many of our smaller employers use brokers to evaluate multiple options for them,” Torrez said.
Weighing the benefits
While there are certainly benefits to providing health care to employees, there are also disadvantages.
“Anytime you add benefits, it’s not just costing dollars for the program, it’s costing you the resources you need to manage the program,” Black said.
Money and time that goes into insurance is money and time that doesn’t go to any other part of your business.
“We’re weighing that advantage against the competitive advantage of providing a healthy workforce,” Black said. “Part of what you need to know is how to make the numbers work for you as an individual business.”
get started
BeWellnm has proven brokers who understand the dynamics of small businesses, Manning said. They work for free with owners to find the right healthcare solution. A plan comparison tool is also available on Bewell’s website.
Finally, employers determine their budget and decide whether they want to contribute a certain amount or a percentage of insurance premiums to each employee. They choose a basic plan for their employees, but employees choose a certain level – bronze, silver, gold or platinum – for themselves. Bronze and Silver levels have lower premiums and higher out-of-pocket costs, while Gold and Platinum levels have higher premiums but lower out-of-pocket costs.
With a 10% reduction in premium costs, healthcare is more affordable for small businesses by 2023.
“It’s going to be a good year for New Mexicans to get health insurance,” Manning said.
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