If you’re considering holding open enrollment at your franchise, there are certain guidelines you need to follow. Being a franchise owner adds an extra layer of complexity to the healthcare open enrollment process; a thorough plan is critical for avoiding fines and other mishaps down the road. Consider the following to help you navigate the process smoothly and ensure your franchise employees are covered.
Calculate the numbers
As a franchise owner, it is important to understand how the employees of different franchise locations are calculated based on the Affordable Care Act (ACA) requirements. One implication of this calculation involves whether an employer is subject to penalties under the employer shared responsibility provisions of the ACA. These provisions require employers with 50 or more full-time employees, including full-time equivalent employees, to provide healthcare options that meet certain standards to their full-time employees and their dependents or face potential penalties.
According to Julie Whittaker with the Congressional Research Service, "An employer of multiple entities (such as a franchise owner with several restaurants) must follow the IRS aggregation rules governing controlled groups. Specifically, if one individual or entity owns (or has a substantial ownership interest in) several franchises, all those franchises are essentially considered one entity."
In short, if there are 50 or more full-time employees, including full-time equivalent employees across all franchise locations in your company, you may be subject to these penalties if:
- You do not provide adequate and affordable coverage to all full-time employees and their dependents, and
- One or more full-time employees receives a premium tax credit after obtaining coverage through a health insurance exchange.
Consider working with your tax and legal team for clarification on how this mandate applies to your particular franchise.
Research your options
There are several different healthcare programs that meet the specifications set forth by the ACA. Partnering with a reputable insurance agent who specializes in franchise employer-sponsored healthcare plans can save you a considerable amount of time and frustration. A good agent can help navigate the healthcare landscape for you and provide the most cost effective options that meet your business needs. It's also best to work with an insurance agent, as this individual can shop around on your behalf to find the best price across several different companies instead of being tied to a single insurance provider.
Keep an eye on the calendar
Like many government-regulated programs, there is very little wiggle room on registration and requirement deadlines. Keep any and all healthcare open enrollment dates on a calendar where you can refer to them often. Failing to meet deadlines can cost your franchise thousands of dollars in late fees and penalties; missing important deadlines can also leave your employees at risk of going without proper medical coverage.
Once you have the submission deadlines, work backward from those dates to determine what deadlines you will set for franchise employees. Give yourself plenty of time to:
- Evaluate which options you will offer employees;
- Share the available options with those employees who qualify;
- Collect election forms;
- Make any necessary calculations for your employer contributions; and
- Submit any payments and paperwork by the specified deadlines.
As you can see, there are many steps when it comes to open enrollment, so it is important to stay organized from the beginning.
Communicate with employees
Once decisions have been made and your healthcare open enrollment offerings have been selected, you'll need to communicate these options to any qualifying franchise employees. Be prepared for employees to have many questions, especially if this is their first year of eligibility or if your chosen healthcare options are significantly different from plans that were offered in the past. Ask your agent to set aside a few "rollout" days where he or she will meet with employees to address their questions.
It's also important to clearly communicate any associated deadlines to eligible employees. Make sure these dates are prominently displayed on any and all registration paperwork, and plan to send frequent reminders of deadlines through multiple channels (email, bulletin boards, etc.). This will help to avoid the hassle of having to chase down employees who failed to submit their paperwork, or dealing with disgruntled workers who miss the deadlines.
All of these steps, when combined, can help you navigate the healthcare open enrollment process as efficiently as possible. The time you invest in developing your healthcare enrollment strategy will benefit both you and your employees.