To get through franchise healthcare open enrollment, you’ll need a strategy for staying in compliance with ACA standards while without detracting from your primary business. Consider the following techniques to begin the process early and plan your efforts:
Calculate your franchise’s health insurance requirements
The ACA requires you to calculate the number of full-time employees on your payroll in order to properly meet your healthcare obligations to your employees. To eliminate loopholes and dubious business practices that might allow some dishonest business owners to avoid providing health care to their employees, the ACA has defined extremely strict processes for estimating full-time employees for health insurance reasons.
Failure to follow these measures or determine the number of eligible employees (full-time and full-time equivalent employees) appropriately can lead to fines, penalties, and even labor litigation. If this calculation shows that your franchise business has at least 50 full-time or FTE employees, you are an applicable large employer (ALE) and must provide affordable health insurance to all full-time employees and their dependents that meets the ACA’s minimum standards, or face a potential penalty. (Full-time equivalents are not required to be supplied insurance.)
Choose health care for your franchise
There are a number of various healthcare programs that meet the ACA’s requirements. Follow these steps to find the best cost-effective plan for you and your employees:
- Talk to your coworkers about health-care options. You may wish to consult with your full-time employees before deciding which insurance plan(s) to offer them. You can ensure that your chosen health plan will act as a solid employee retention incentive as well as a tool to recruit top personnel by researching their demands and particular concerns.
- Take into account the prices. Providing healthcare for franchise employees is an expense for your company, but it’s also an expense for your employees. Consider both sides before selecting add-ons or deductible alternatives. Make sure your firm isn’t paying for coverage that your employees don’t need, but also that your cost-cutting initiatives don’t leave your employees with unmanageable deductibles and out-of-pocket costs.
- Make a health-care plan. You have various alternatives for providing coverage to your employees as a franchise owner. Individual or group plans are available, while group plans are likely to be more cost-effective for groups of 50 or more employees. You can choose among HMOs, PPOs, high-deductible health plans (HDHPs), and other speciality group alternatives even inside group plans.
- Speak with a licensed insurance agent. Working with a reputable insurance agent who specializes in franchise-sponsored healthcare plans can help you save a lot of time and money. Instead of being bound to a single insurance carrier, a good agent can assist you navigate the healthcare landscape and deliver the most cost-effective solutions that match your company needs by shopping around on your behalf to discover the best pricing among numerous firms.
Keep an eye on the calendar
There is very little wriggle space on registration and requirement deadlines, as there is with many government-regulated programs. Keep a calendar with any and all franchise healthcare open enrollment dates so you can refer to them easily. Failure to fulfill deadlines can result in thousands of dollars in late fees and penalties for your franchise. Missing critical deadlines can put your employees at risk of losing their health insurance.
Working backwards from the submission deadlines can help you identify what deadlines you’ll set for franchise personnel. Make sure you give yourself enough of time to:
If your franchise is classified as an ALE, there are many criteria for tracking and reporting healthcare offers to employees. Forms 1094-C and 1095-C, in particular, must be filed by February 28 of the calendar year after the open enrollment period. These deadlines are subject to change, but employers who complete Form 8809 on time will obtain an automatic 30-day extension. As you can see, there are a lot of steps to open enrollment, so it’s critical to keep organized right from the start.
Communicate with franchise employees
After you’ve made your decisions and chosen your franchise healthcare open enrollment options, you’ll need to inform any eligible franchise employees about them. Take the following proactive efforts to reduce employee confusion and improve employee satisfaction with benefit offerings:
- Prepare yourself by educating oneself and anticipating queries. If this is their first year of eligibility, your employees are sure to have a lot of questions. Prepare extensive written descriptions of coverage options and benefits, as well as advise on how to select the appropriate plan for an employee’s unique circumstances and enroll in it. Consider offering new employees with a video lesson or other similar material.
- Request a meeting with your staff from your agent. By offering an open forum for employees to explore coverage choices, you can avoid numerous questions. Request that your agent set out a few rollout days for scheduled sessions during which employees can ask the expert any issues they have.
- Any linked deadlines should be communicated clearly. It’s also crucial to make any connected deadlines apparent to all qualified personnel. Make sure these dates are prominently displayed on all registration forms, and plan to send deadline reminders via numerous channels on a regular basis (email, bulletin boards, etc.). This will save you the trouble of having to track down employees who haven’t turned in their papers or dealing with irritated staff who miss deadlines.
Do franchise owners get benefits?
- The failure rate is low. When you buy a franchise, you’re buying a proven concept with a track record of success. Franchises have a considerably better probability of success than independent start-up firms, according to statistics.
- Assistance with a business. Throughout the life of their business, franchisees receive invaluable support. Many franchisees are actually turnkey businesses. When you purchase a franchise, you will receive all of the necessary equipment, supplies, and training to get your business up and running. In many circumstances, you’ll get ongoing training and management and marketing assistance. Your franchise, for example, will profit from the parent company’s national marketing activities.
Do franchises offer benefits to employees?
Individually, small business and franchise owners do not qualify for large group plan pricing or enhanced coverage in both medical and non-medical (life, disability, accident, etc.) benefits. They typically pay higher per-employee wages and have more severe “participation” criteria than huge corporations. Group life insurance, disability (short and long term), and other benefits are frequently more limited in coverage and benefits than what a major corporation may receive.
Large organizations also have HR and benefits professionals to help them navigate the complex waters of benefit sourcing and delivery.
Small businesses manage to do all of this while juggling…well, juggling!
As a result, many smaller businesses are unable to afford or refuse to provide benefits, leaving employees to fend for themselves on the individual market or through state and federal exchanges. In fact, just 55% of small businesses in the United States provide medical and other benefits to their workers.
Most small businesses want to provide benefits to their employees, both because it’s the right thing to do and because it allows them to compete for talent with larger companies while also retaining the good staff they already have.
Small business owners would jump at the chance to expand benefits for themselves, as owners, and their employees if the constraints of “not enough” time and “too expensive” were removed.
Thankfully, the Labor Department has suggested a regulation change that would make it easier for them to obtain group benefits.
At its most basic level, this change will employ a broader definition of how enterprises or franchisees might band together to create an association for the purpose of collective benefit sourcing. Many more small businesses and franchises would be able to offer benefits through an Association Health Plan thanks to this newly enlarged set of requirements, which includes industrial, geographic, and professional interests (AHP).
The proposed rules, which are expected to be finalized by the end of 2018, broaden and relax the business purpose and “common business interest” standards by allowing small business owners to band together to sponsor an association health plan if they share: (1) a common industry, trade, or profession (as is the case now), or (2) a common geographic location (as is the case now) (opening the doors for “chamber of commerce or geography-based groups). Only one of the conditions would have to be met by organizations, not both. While members in the same geographic area may work in completely different industries, business associations whose members operate in the same trade or industry can sponsor group health insurance regardless of geographic distribution.
What is a franchise health policy?
Small groups can get health insurance through franchise plans. The coverage is frequently less expensive and includes some of the same advantages as group health insurance. Unlike group insurance, each person covered by a franchise plan has their own policy.
Who pays payroll in a franchise?
Franchise employees are paid by their employer, just like employees in any other form of business or industry. This is usually the franchisee, but it can also be the franchisor.
Who is my employer if I work for a franchise?
You might think of McDonald’s when you hear the phrase “franchise.” Though the fast-food franchise is the most well-known in the world, it is far from the only one. A franchise is, in essence, a mechanism for a person or organization (the franchisee) to start a business without having to start from the ground up. For example, if you wanted to establish a cleaning business, you could do so on your own and learn as you go, or you could buy a franchise. A business plan, as well as a variety of items or services to provide, would be laid out for you as part of the franchise. You’d get ready-to-use logos and marketing ideas, and you could split the advertising expenditures. There may also be assistance available along the route to help you get your business off the ground and prosper in the long run.
The franchisor is the organization that offers you this business opportunity and provides you with plans and guidance. It makes money through recruiting new franchisees with upfront payments, a share of the franchisee’s earnings, and sales of everything from equipment to uniforms to food. The two parties sign a contract in which the franchisee agrees to operate the business (the franchise) in exchange for money, the purchase of specified things, and adherence to a set of rules and procedures. These guidelines exist to ensure that the customer experience is consistent. In a McDonald’s franchise in Virginia, Ontario, or Scotland, a customer should see, hear, and taste the same things in all three locations (which is why franchises are so loved and so hated).
Restaurant franchises aren’t the only type of franchise available. Restaurants are among the ready-made businesses listed in this Entrepreneur magazine article on the top franchises for 2016, but they also include cleaning services, motels, auto repair shops, hair salons, convenience stores, fitness centers, and hardware stores, among others.
Do franchise owners take a salary?
Franchise owners play the same game as regular business owners, taking up much of the franchise’s administration and management. What is the average franchise owner salary if they are still responsible for sustaining the business?
Franchise owners, unlike most other occupations, do not receive conventional, flat-rate pay. Instead, both the franchisee and the franchisor profit from the success of the firm. The royalties and fees paid by franchisees are how a franchisor makes money. Profits from sales and service transactions are how a franchise owner makes money. After overhead expenditures are deducted, this is usually the amount of money left over from revenue. Equipment costs and fees, inventory and supplies, staffing wages and perks, and ultimately, upkeep costs of a physical location such as energy, internet, and so on are all examples of overhead costs. The fact that there are expenses connected with owning and maintaining a franchise is frequently what distinguishes it from a regular business model. The greatest cost is paid at the time of the franchise’s first purchase, and it necessitates a considerable number of money up front. The majority of franchisors will thereafter earn recurring percent or set fees.
Percentage fees are calculated based on total gross sales and typically range from 5 to 9%. If a franchise’s total monthly gross sales income is $10,000 and the contract stipulates a 6% fee, the monthly costs will be $600.
Fixed fees are fees that are set and paid at regular periods, such as monthly, quarterly, or annually.
These overhead costs and franchise fees are usually included in the final total selling pricing for the items and services provided. Any money that is left over is referred to as profit. That profit is frequently taken home by franchise owners or used to expand the business.
What is a franchise deductible in insurance?
Franchise Deductible the amount of loss that must occur before insurance coverage kicks in. When a franchise deductible is met, the entire amount of the loss is reimbursed, subject to the policy limit.