Question: What is the most important thing to know about shopping healthcare in the U.S.?
Medical insurance in the U.S. is usually accessed in one of two ways:
- The individual person buys insurance for themselves and their family off the open market. This option can be very expensive and many people may find it confusing.
- A company with at least two employees provides medical insurance to its employees. In the U.S.—unless required by a state or local ordinance—a company is only required to offer medical insurance to its employees under federal law if it has more than 50 employees and meets the applicable large employer (ALE) designation under the Affordable Care Act.
Many small businesses offer medical insurance as a way to stand out from the competition for talent. Once a company offers medical insurance, it is required to abide by all Affordable Care Act regulatory requirements. These regulations can focus on what is included in the plan offering, what the company pays for and which employees are eligible.
In the U.S., smaller companies may find it easier and more cost-effective to procure group health insurance by utilizing the services of a professional employer organization (PEO). A PEO can help companies of any size access big company benefits, secure top talent and maintain compliance with employee benefits-related regulations.
Question: What are the core services all companies launching in the U.S. must have and is there anything people should know about these services?
Companies hiring one or more employees in the U.S. should have the following in place:
- Payroll: Employees must complete their portion of Internal Revenue Service (IRS) forms I-9 (proof of being legally allowed to work in the U.S.) and W-4 (for income tax withholding purposes) no later than the third and first days of employment, and employers follow all payroll-related regulations in their state and/or jurisdiction.
- Workers’ compensation: Employers in the U.S. are required to provide workers’ compensation insurance to employees in the event of an injury while on the job, unless exempt under state law. This insurance covers costs due to employee injuries while at work, while also protecting the employer from being sued by the employee for the injury.
- Medical insurance: While companies of a certain size may be required to provide this employee benefit, many smaller companies find it essential to their ability to attract and retain top talent.
It is important for companies to know that each of these aspects of being an employer in the U.S. requires compliance with various laws and regulations at the federal, state and local levels. These laws can vary state by state and jurisdiction by jurisdiction and they can change frequently. This is why many companies find a PEO useful to help maintain compliance. Additionally, a PEO can help companies with best practices and guidance that can help them avoid costly claims and operate efficiently—including help designing an attractive employee benefits package to aid in recruitment efforts, risk mitigation help, and even guidance in keeping the workplace safe to avoid injury and costly workers’ compensation claims.
Question: Do employers in the U.S offer pensions or a similar retirement benefit?
A 401(k) is an employer-sponsored plan that allows employees to save for retirement via payroll deductions, either on a pre-tax basis or with a “Roth IRA” post-tax deduction structure. Smaller employers (100 employees or less) are less likely to offer a 401(k) plan than larger employers. However, with a tight labor market in the U.S., many smaller employers have seen the benefit of adding a 401(k) plan to their employee benefits package in order to become more competitive in attracting and retaining top talent. Employers that work with a PEO are able to participate in the PEO’s Multiple Employer Plan, in which the PEO assumes the plan administrator role and most of the fiduciary liability.
Question: What is the advantage of using a PEO like TriNet?
A PEO, such as TriNet, can help companies navigate doing business in the U.S. by handling their HR needs. This makes it easier for them to stay compliant and on top of the ever-changing world of HR, while freeing them to focus on the many other aspects of running a small business. The result is that the company is in a better position to maintain compliance, attract top talent and focus on what matters most—growing their business.