In a tough labor market, health care insurance may be just the amenity small business owners need to attract and retain employees. Fortunately, it just got 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 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 care insurance can enhance productivity. When people have insurance, they tend to prioritize preventative care, which can result in less illness and sick leave, said Maureen Manring, beWellnm’s director of communication and outreach. BeWellnm is a shopping platform for health insurance plans that are regulated by New Mexico’s 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 employees or less that purchase coverage from the small group market. The program is the result of a bill passed during the state’s 2021 legislative session that created the Health Care Affordability Fund.
Employers can take a tax deduction for the cost of the health insurance premiums they paid for their employees. In addition, employers may be eligible for a tax credit for up to 50% of the 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 the premium costs for their employees’ health care insurance, and purchase that insurance through beWellnm for Small Business. They can claim 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 carriers provide plans for small businesses. 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 generally have lower premiums and a local network of doctors and other health care providers. PPOs offer coverage for providers both in and out of the network, but the premiums and out-of-pocket costs can run higher.
“Small employers really want financial predictability. They’re really concerned about their bottom lines,” said Brandon Fryar, president of Presbyterian Health Plan. “They want to recruit and retain. And how do you do that is enhanced benefits, or targeted benefits, that make sense for your employees.”
The insurance carrier is launching a virtual health care option for small businesses in 2023. In exchange for lower costs, employees receive a medical exam kit at their home which allows doctors to provide services to them via the internet.
“It’s a more convenient option,” Fryar said. “We know more employees are working from home, and they’re more accustomed to getting services at home.”
Although they won’t qualify for the tax credit, small business owners can go outside of beWellnm and find health care insurance from other insurance carriers. Blue Cross Blue Shield of New Mexico, for example, offers benefits for all employer sizes and types, said Janice Torrez, president of BCBSNM.
“Many of our small employers also utilize brokers so that they can evaluate multiple options for them,” Torrez said.
Weighing the benefits
While there are definitely pros to providing health care for employees, there are also cons.
“Anytime you add benefits, it costs not only dollars for the cost of the program, but the resources you need to administer the program,” Black said.
Money and time that’s going toward insurance is money and time that’s not going toward some other part of your business.
“You’re weighing that against your competitive advantage of providing the benefit, the healthier workforce,” Black said. “Part of what you have to figure out is how to make the numbers work for you as an individual business.”
BeWellnm has certified brokers that understand the dynamics of small businesses, Manring said. They work with owners free of charge to find the right health care solution. There is also a plan comparison tool on beWellnm’s website.
Ultimately, employers determine their budget and whether they want to contribute a flat amount for each employee or a percentage of the insurance premium. They choose a base plan for their employees, but employees then select a specific 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 the 10% reduction in premium costs, offering health care is more affordable for small businesses in 2023.
“It’s going to be a great year to secure health insurance coverage for New Mexicans,” Manring said.