January 24, 2025
7 min. read

Health Plans 101: A Comprehensive Guide for Growing Businesses

Before we get started, let’s cover a brief overview of what the Affordable Care Act is and take a look at how they define an ALE for tax purposes. The Affordable Care Act, otherwise known as the ACA was signed into law by President Obama in 2010, aiming to expand healthcare coverage, establish the healthcare marketplace for businesses and individuals alike to shop for alternative benefit solutions, and lastly to enforce consumer protections to be more inclusive. 

Some of those new changes require coverage to not deny benefits based on pre-existing conditions, cover essential health benefits and preventive care at no cost, and extend dependent coverage until the age of 26. For further explanation of the ACA you can read more from KFF here

As your business grows and approaches ALE status, you need to understand the definitions and implications of the penalties. ACA defines an ALE as any company with 50 or more full time equivalent employees. This means you can employ both W2 workers and part time or seasonal employees, and if they work at least 30 hours per week or 130 hours per month, they go towards your total full time employee headcount. You can use this simple calculator from ACWise to see how your team stacks up. 

Now that you understand where you stand as an ALE, let’s review the penalties for non-compliance. For companies not offering health coverage, the penalty is $2,970. For not offering affordable coverage that meets minimum essential care value, the fee is $4,460 per employee. For group sponsored health plans, the fees vary but are still substantial—you can view specifics here from SHRM. 

Now that we have the important framework stood up, let's move on to shopping for the best employee benefits for your team. If you’re going to scale your business in 2025, you’ll need to know what questions to ask and how to spot those red flags we mentioned before. So let’s dive in. 

1. Understand Your Workforce Needs

Before diving into plan options, evaluate your team’s demographics and preferences. Consider taking a company wide census to update your records if you have not done so recently. This will also lay the groundwork for a smooth tax filing. 

Consider the following:

2. Know Your Coverage Options

The health insurance landscape offers more than just traditional plans through brokers. We understand you may have a long history with your broker and now that you’re growing it may be time to consider alternatives. Signing the ACA into law in 2010 has opened the state and federal marketplace for insurance carriers to provide various health options. 

Here are some alternatives to consider:

3. Watch Out for Red Flags

Not all health plans are created equal. There are pros and cons of each of the suggested plans above. Be sure to weigh your options, look carefully at your budget. Be sure you consult your accountant or tax professional to understand your budget. This will give you a clear outlook when considering healthcare options. 

Be on the lookout for these warning signs:

4. Seek to Lower Premiums While Keeping Quality Coverage

Balancing affordability with comprehensive benefits is key. Be sure you fully understand the scope of coverage before proceeding with enrollment. With a flexible workforce depending on the time of year, you’ll want to keep in mind health benefit options that apply to your workforce as a whole. 

Here’s how to make it happen:

5. Avoid “Too Good to Be True” Options

Some plans may look appealing on the surface but fall short for businesses like yours. As a growing business with a diverse workforce you must remember to keep your employees in mind. They are the backbone of your business and it’s your obligation to provide health coverage that is accessible and affordable. 

Be cautious of:

6. Build Trust with Your Provider

You’re not just buying a plan; you’re forming a partnership. Look for benefits providers who offer end to end support, lower premiums, year-round guidance, and flexible, affordable benefits converge. 

Look for providers who:

Take the Next Step

Shopping for health benefits doesn’t have to be overwhelming. By understanding the ACA regulations, knowing your workforce demographics, exploring alternative options, and knowing what to watch out for, you can confidently choose a plan that supports your employees, your growing business, and your bottom line. 

Here are some ACA compliance FAQs to help you along the way.

Want a deeper dive? Download our free guide, “How to Shop for Employer Health Plans: A Cheat Sheet for Growing Businesses,” to get actionable tips and a checklist to make your search easier.

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