The City Option offers two separate programs, both managed by the city government:
As of January 1, 2014, employers with 50 or more full-time employees must also consider their obligations to provide health insurance coverage as required by the federal Affordable Care Act (“ACA”) including reporting requirements and penalties.
The city's programs and our compliance solution are similar in that they cost no more than the minimum prescribed by the law. The administrative effort on the part of the employer is also substantially the same. Why, then, should you choose AGU's Limited Accident & Sickness Indemnity Plan over the City Option?
Employees will appreciate AGU's Limited Accident & Sickness Indemnity Plan more than the City Option, (resulting in lower turnover) because:
Group insurance policies have long enjoyed tax-advantaged status in two respects. First, premiums paid by an employer are deductible as a business expense and second, neither the value of the employer’s contribution nor the value of benefits received under the policy are taxable income to employees. Neither part of the City Option involves group insurance so the tax treatment may not necessarily be the same. Consult your tax advisor.
Please note that, with the implementation of ACA, there are additional tax considerations: