The COVID-19 pandemic has shone a light on working environments, particularly the possibilities of working remotely. According to a GetAbstract survey, almost 43% of full-time employees in America want to work remotely even once this crisis has passed, and the economy reopens. But, is this beneficial for companies? Can working from home save companies money?

The pandemic accelerates the shift to remote work

As most people are aware, since the COVID-19 outbreak, the economy has been on hold. Lockdowns went into effect in March, and businesses were encouraged to have employees working remotely from home to maintain social distancing. 

While this was not possible in all industries, the economy’s closure forced many companies to consider the ways that employees could work remotely. Although this took some logistical planning, the abundance of technology that we now have has made it feasible.

There have also been some unexpected effects of employees working from home. According to an IQAir report, the slowdown of economic activity during the pandemic has the potential to reduce fine particulate air pollution by as much as 60%.

In a Gartner survey, 3 out of 4 finance executives asked are considering moving at least 5% of onsite workers to a remote position permanently after the current pandemic crisis ends.

However, what many companies want to know is if having remote workers will save them money and what other benefits it could provide.

Cost savings of allowing employees to work from home

There are lots of ways that remote working can offer businesses cost savings. Many established businesses have already enjoyed savings due to telecommuting. Sun Microsystems identified savings of $68 million a year in its real estate costs, while Dow Chemical and Nortel have saved over 30% on non-real estate costs.

According to Global WorkplaceAnalytics, almost 6 out of 10 employers identify cost savings as a major benefit of telecommuting.

Rent and utilities: If most of your team is working from home, you won’t need to pay for larger premises, saving money on rent and utilities.

Cleaning services: With minimal staff onsite, your cleaning services bill is likely to significantly decline.

Food: Whether it is providing a cafeteria service or serving refreshments during meetings, if you have remote employees, you will eliminate this cost.

Taxes: There are three factors that determine a company’s tax burden: payroll, sales and property. Making changes to accommodate remote workers could also impact your tax burden.

Other potential benefits of a remote workforce

While direct money savings are important, there are other benefits associated with telecommuting that can save money in the long term.

Improved employee retention

Recruitment can be one of the biggest headaches for businesses, and it can be even more frustrating when those carefully sought-out team members decide to leave.

Working from home can provide parents with childcare responsibilities flexibility, while other workers can enjoy an enhanced work-life balance that will help your business to see an improvement in employee retention.

Increased productivity

While it requires a certain degree of trust to allow employees to work from home, your business could benefit from increased productivity. A Stanford study found that remote workers are 13% more productive when compared to their in-office counterparts. 

Remote workers are not in a loud environment and are not distracted by their co-workers. Additionally, remote workers don’t have the stress of commuting, which means that they can focus on the task ahead rather than needing time to calm down after tackling the morning rush hour.

Reduced payroll costs

While you’re not likely to have happy employees if you want to cut their salaries in exchange for a more flexible workplace, research shows that almost one-third of employees would choose to work from home over a pay raise.

This means that you can reward your employees for their good performance with the flexibility of working remotely rather than a pay increase. You can keep your payroll costs down without compromising productivity.

Reduction in absenteeism

Flexible scheduling allows your team members to fit their work around any personal obligations that would otherwise have, resulting in taking a day or two off.

However, studies have shown that a flexible work schedule also leads to healthier employees. Remote workers tend to be able to bounce back more quickly from illness, and there is no risk of one cough or cold traveling through your entire workforce, should someone fall ill.

Eliminate unnecessary meetings

Most business owners appreciate that meetings can be a time suck and waste precious resources. Even with the most stringent of agendas, it is still difficult to keep everyone on track and organized.

There are also delays that result from trying to coordinate people from multiple departments into one venue. With current technology, you can still collaborate, but your meetings are likely to be better planned and remain on message.

The costs of employees working from home

Teleworkers will need access to software, data and your computer systems. You may need to make some infrastructure changes to support remote workers and prepare for any remote technical support issues.

Fortunately, there are lots of solutions on the market, but you will need to factor this into your costs. You will need to think about what software and other tools your team will need to work efficiently from home. For example, you may need to pay for video conference software or other collaboration tools.

The potential drawbacks

No solution is 100% perfect, so you need to be aware of the potential drawbacks before you commit to adopting a teleworker team. These include:

It isn’t a good fit for everyone. Teleworkers need to be self-directed and comfortable working with remote technology. Additionally, your employee needs to understand that working from home is not a replacement for day care, unless work can be scheduled around their child’s needs. They need to have a defined space for their home office and be able to work without distractions.

Employee fears for career progression. Some employees may fear telecommuting may impact their career progression. They may feel frustrated that they may be overlooked and not have a chance to adequately showcase their skills since they are out of sight. These employees may require regular communications via email, instant chat, phone or even face-to-face meetings to reassure them.

Data security. Security issues can be easy to solve, but they do need to be addressed and could be a potential drawback for your company. Security training will need to be provided for all employees, which will impact cost savings.

Collaboration concerns. Some businesses require energy in the room to fuel effective collaboration. If your company works in this way, distance could inhibit your collaborative processes.

OSHA and employment law concerns. There have been accidents in teleworker’s homes that have raised employer liability concerns. OSHA has several directives for work-from-home employees, and you will still have a responsibility to ensure there is a safe, healthful workplace. There could be issues if you are aware of dangerous conditions in your workers’ homes. An example of this is if your employee works in their basement and the stairs leading to this space are unsafe. This can create legal issues that will need to be fully explored.

Local issues. Some homeowner associations and communities prohibit home offices. There are also clauses in home insurance policies that do not permit working from home. You will need to ensure that your employees are fully aware of these potential issues before you agree to a remote working arrangement.

Tax implications. Finally, while you may be able to cut your costs, there are some potential tax implications associated with having remote workers. For example, there are some cities, such as New York, that impose taxes on remote workers whether they are working in the city or not. This means that if a worker lives in Connecticut, the business may owe taxes to both states.

Conclusion

In the past, working from home was unfeasible for many companies, but today’s technology has made it easier to make this transition. Having remote workers offers businesses a number of benefits, including saving money, but some potential drawbacks need to be explored. Although working from home can save companies money, there are hidden costs that will need to be assessed.

Every business is unique, and so you will need to evaluate the benefits and drawbacks as they apply to your specific business before you make a decision. However, it is worth considering that the COVID-19 pandemic has brought remote working to the forefront of employee’s interest, so it is a good idea to start laying the groundwork to determine if it is feasible for your business after the current crisis has ended.

Original Source: business.com

Affordable healthcare insurance is an essential benefit to offer your employees. Because of the Affordable Care Act, it may even be legally required, depending on the size of your business. To maintain legal compliance, you first need to understand what the ACA is, what recent changes have been made to it and how it impacts your business.  

What is the Affordable Care Act (ACA)?

The Patient Protection and Affordable Care Act (also known as the Affordable Care Act, PPACA, ACA or Obamacare) is a healthcare reform law that went into effect under President Barack Obama’s administration on March 23, 2010. The primary objective of the Affordable Care Act is to regulate the cost of health insurance and expand Medicaid coverage. Although some aspects have been repealed under President Donald Trump’s administration, much of the Affordable Care Act is still applicable to your business.   

 

Editor’s note: Looking for the right health insurance plan for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

 

 

Who benefits from the Affordable Care Act?

The purpose of the Affordable Care Act is to ensure that every American has access to affordable health insurance. Although the ACA presents some challenges for businesses, it benefits several groups, including low-income households, people with preexisting medical conditions and children. 

The ACA benefits low-income households, or households with “income limits,” by expanding Medicaid coverage to apply to a larger group of individuals.    

“The ACA directly expanded Medicaid eligibility to people falling below 133% of the federal poverty guideline, which in 2020 is $12,760 for a single-person household, $17,240 for a two-person household, and just over $26,000 for the average four-person household,” said Ty Stewart, president and founder of Simple Life Insure.   

The ACA directly benefits individuals with preexisting medical conditions who may have previously not had access to affordable healthcare, since it prohibits insurance companies from denying coverage or charging additional premiums due to preexisting conditions. 

Children are also allowed to stay on their parents’ health insurance plans until they turn 26 years old, receiving health coverage for several essential services like pediatric and preventive care, lab tests, prescription drugs, and mental and behavioral health treatment. 

How the Affordable Care Act impacts your business

Before the Affordable Care Act went into effect, all businesses had the option to offer or not offer health insurance to their employees. The healthcare reform law changed that. The ACA declared that small businesses with fewer than 50 employees can provide their employees with insurance or let their employees sign up for their own insurance coverage separately; however, businesses with 50 or more employees are legally required to offer their employees health insurance. 

Reporting health insurance coverage

Rolling out these policies takes effort on your part as an employer. Denise Stefan, president of Engage Insurance Agency at Engage PEO, said that small businesses are required to report the value of the health insurance coverage provided to each employee on annual W-2s, and if you choose health insurance that is considered “self-insured,” then you also have to file an annual report providing certain information for each covered employee. 

You may also be required to pay a fee to help fund the Patient-Centered Outcomes Research Trust Fund. “Small employers must also withhold and report an additional 0.9% on employee wages that exceed $200,000 per year,” said Stefan. 

Small Business Health Options Program (SHOP) and tax credits

Although the ACA presents a few challenges for small businesses, it also has some benefits for the employer – a primary one being tax credits. Since providing health insurance is not always practical for very small businesses, the Affordable Care Act created the option of affordable health insurance and tax credits for small businesses. 

Small businesses with fewer than 50 full-time employees can purchase affordable health insurance through the Small Business Health Options Program (SHOP) – given that they meet the four eligibility requirements. Businesses with SHOP insurance and fewer than 25 employees may qualify for the Small Business Health Care Tax Credit, worth up to 50% of their premium costs. (This may differ by state.) 

“Small employers were not mandated to provide coverage, like large employers, but if they had no more than 25 full-time employees, they could take advantage of the tax credit as long as they provided qualifying health insurance for their employees, paid for at least half of the cost of the insurance and paid an average yearly salary of less than $50,000,” said Stefan. 

This tax credit is available to eligible employers for two consecutive taxable years and granted based on a sliding scale (i.e., smaller businesses receive larger credits). 

Employer mandate penalties

Since the goal of the Affordable Care Act was to reduce the number of uninsured Americans, it originally required everyone who could afford health insurance to either buy it or face a penalty for noncompliance. Although the penalty for individual mandate noncompliance has been lifted, some states may still have penalties in place for qualifying businesses that don’t offer essential health benefits. These penalties often do not apply to very small businesses, though. 

“In 90% of cases, small businesses with fewer than 25 employees will not be fined penalties for not offering health insurance, so you can at least breathe easier about that,” said Stewart.    

Changes to the ACA in 2020

Many changes have affected the Affordable Care Act over the years, so we spoke with experts to learn the most recent impacts. Stewart said many of the ACA’s largest changes mirror the insurance industry’s broader responses to COVID-19: 

More private insurers offering SHOP plans: There has been an uptick in short-term plans being allowed to extend from three months to 12 months, which can save small businesses money if they meet extension qualifications.

No individual penalty: In previous years, individuals had to pay a penalty come tax time if they were uninsured for longer than three consecutive months. In 2020, that individual mandate penalty has been waived. The only exceptions to this are Rhode Island and California, as legislators in these states decided to continue fining uninsured residents.

Rolling enrollment: The ACA and SHOP plans now offer employee enrollment outside the standard enrollment period.

FSA contribution increases: Employees in most cases can increase their contributions to their flexible spending accounts until 2021. 

Additionally, many taxes that were initially designed to help pay for the Affordable Care Act have been repealed by both the House and the Senate, in conjunction with the passage of the December 2019 spending bills. 

“The health insurance tax, the Cadillac tax and the medical device tax were all repealed as part of the spending bill,” said Stefan. “The repeal of the health insurance tax was passed after most 2020 insurance premiums were already in place. As a result, the effect of the change in that tax will not be felt until 2021.” 

When choosing health insurance for your company, it is best to seek an expert on the health insurance marketplace and state requirements for minimum essential coverage. 

“My biggest recommendation is to reach out to a SHOP broker or agent in your state,” said Stewart. “These are experts who can provide the most accurate information on pricing and plans available in your state’s marketplace, as well as your business’s exact liabilities. There is so much marketplace variability across the country, so these SHOP brokers really are your best resource.”

Original Source: business.com