Benefits strategy

Employers have several options to provide major medical insurance coverage for their employees in the new health care reform environment. Deciding which option meets both business and workforce needs is important to navigating the new health care landscape, as well as gaining a competitive edge in the battle for top talent.

Direct to insurer

A traditional way of offering insurance, companies may consider going directly to an insurer. In this option, benefits are provided through a single insurance carrier. Employers shop and choose workplace plans on a “fixed-benefits” basis.

  • The employer chooses the carrier and plans offered to employees.
  • Premium costs are agreed upon for a year, so rates won't change.
  • Insurance carrier assumes the risk of employee claims.
  • Multiple carriers may be necessary for each benefit offering – medical, dental, vision, disability, etc.
Tax Credits
  • The employer will not be eligible to receive small-business tax credits.
  • Employees may be eligible to receive Health Insurance Marketplace subsidies if their employer’s coverage does not provide minimum value coverage and/or the employee contribution is more than 9.5 percent of the employee’s household income.
  • Starting in 2015, employers with 100 or more full-time equivalent employees may be subject to shared responsibility penalties if coverage either does not meet affordability or minimum value requirements. In 2015, employers must offer coverage to 70 percent of full-time employees and their dependents, and to 95 percent by 2016. Starting in 2016, employers with 50 or more full-time equivalent employees will need to comply with the same requirement.
  • The employer is responsible for administration and management.
  • The employer will submit required reporting to the Department of Health and Human Services and the Internal Revenue Service.
Employee tools and resources
  • Tools and resources for open enrollment and benefits education will depend on their availability from the chosen carrier.
  • Employees select from health plan choices that are made available by the employer.
Supplemental Insurance Protection
  • Supplemental benefits, such as disability, life or accident insurance, may need to be purchased separately.
  • These policies can help employees cover out-of-pocket costs associated with illness or injury.
To learn more about available options visit:

Key considerations

Companies that want greater control over benefits choices offered to employees, or prefer a certain carrier may consider offering insurance direct to insurer. Talk with a broker or benefits consultant to help determine if this benefits delivery option is right for your business.

For more information

You can find more information about multiple benefits strategies, including: self-funded coverage, maintaining grandfathered status, Small Business Health Option Program (SHOP) Marketplace, a private marketplace at A comprehensive summary is available in The Employer’s Guide to Health Care Reform.

As you continue to navigate health care reform, you can rely on Aflac to provide updates and helpful information at: To learn more about coverage available in your state, visit:, and

This material is intended to provide general information about an evolving topic and does not constitute legal, tax or accounting advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer or individual will have to consider in their benefits decision-making process. We strongly encourage readers to discuss their HCR situations with their advisors to determine the actions they need to take or to visit (which may also be contacted at 1-800-318-2596) for additional information.

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