Small Employers: Should You Help Employees Enroll in Medicaid?

Have you considered enrolling your eligible employees in Medicaid?

Under the Affordable Care Act, employers with 100 or more full time workers must offer affordable health insurance coverage. In 2016, employers with only 50-100 employees will also have to comply. With the high cost of health insurance, offering health insurance to employees could have a major impact on your business' bottom line.

Medicaid for Low Income Workers

Arizona, Connecticut, California, Iowa, Kentucky, and 25 other states have recently expanded Medicaid eligibility under the Affordable Care Act.

Before Medicaid was expanded, individuals who made more than 100% of the federal poverty level, about $11,670, did not qualify for Medicaid. If your employees made more than $11,670, you would have had to provide them with health insurance as required by the law.

Under the Affordable Care Act's Medicaid expansion, low income employees earning up to 133 percent of the federal poverty level, or about $16,000, are now eligible for Medicaid coverage.

Enrolling Your Employees

If you have low income employees, you can consider helping enroll your employees in Medicaid. If your employee gets health insurance under Medicaid, you can avoid paying the $2,000 per employee penalties and a share of your employees' insurance premiums.

While encouraging your employees to enroll in Medicaid is legal, there are some steps you should take to avoid violating the law:

• No incentives -- While you can educate your employees about Medicaid and Medicaid eligibility, don't offer incentives to employees to choose Medicaid over your employer plan. Incentives are illegal under federal law.
• Don't refuse coverage -- Do not deny your Medicaid-eligible employees coverage under your employer provided plans. Even if Medicaid may be more cost effective for your employees, you must still offer them the choice of enrolling in your company plan.
• Do document -- If your employees do decide to enroll in Medicaid, get signed waivers that state they declined the offered company plan.

Since Medicaid enrollment, unlike other insurance plans, is open all year, don't wait to educate your eligible employees about Medicaid.

Related Resources:

• Might your workers be eligible for Medicaid? A start-up helps employers find out. (The Washington Post)
• Don't Forget: 'Obamacare Letters' Due Oct. 1 (FindLaw's Free Enterprise)
• How Obamacare's Employer Mandate Affects Small Biz (FindLaw's Free Enterprise)
• Health Care Reform: Tax Changes for Small Businesses (FindLaw's Free Enterprise)