The labyrinth that is the health insurance industry can dismay and confuse even the most determined employers. With so many options, so much bureaucracy and red tape surrounding health plans, and the cost climbing on a yearly basis, finding the right health coverage for your small business can quickly become a nightmare.
We’re taken some of the five most popular options and explained them in detail, so you can have a much better idea of what to look for and what options are available to you. Keep reading to learn five ways to offer your employees health care.
1. GCHRA
A group coverage HRA option will allow you to offer employees a health care package that covers a bit more than other options. This employer-funded plan offers reimbursement to employees via a high-deductible group health insurance plan. The premium costs are generally less, and the employees’ coverage may or may not be more extensive than with other plans. The HRA plan will help reimburse employees for out-of-pocket medical expenses, which can occur easily with a high deductible.
These allowances are generally given out on an annual basis, and there’s no rollover. If they’re not utilized, the allowance will just reset at the beginning of the new year. It’s important to look closely at your company’s financials before deciding on a plan to see if you can meet the plan’s monetary requirements for employer matching.
2. Link With a PEO Service
One easy way that small businesses have acquired competitive insurance packages and rates is by pairing with a PEO service. PEOs, or professional employer organizations, handle most of the HR services of a business; from payroll to taxes and even benefits options. With so many businesses operating together under one PEO service, the company can offer its clients’ employees much better rates on health insurance packages.
A stand-alone small business may find that locating a good health insurance package for employees is nearly impossible without a PEO, or rather, is all too expensive in comparison to the income level of the business. Linking up with a PEO can grant you access to lower premiums and employer matching, saving you money down the line and making your employees much happier. Not to mention, the best benefits packages have a much better chance of attracting more qualified candidates to your business.
If you’re looking for PEO information, use this link for finding the best PEO company in New York for your business.
3. Self-Funded Insurance
This often more expensive route means that your organization will be responsible for handling any out-of-pocket medical costs that your employees may come across. This is much more risky, as medical expenses can add up quickly, even for minor injuries or ailments. A large enough claim could potentially put the business underwater before it ever gets on two legs!
This option is usually preferred by smaller businesses, as the more people that operate in your organization, the more potential expenses there are. You’ll want to be certain you’ve got some kind of plan for high-cost claims, such as a savings account or secure revenue stream for just that purpose.
4. QSEHRA
This lengthy acronym stands for “Qualified Small Employer Health Reimbursement Arrangement”. This popular option among small businesses allows a business to set aside a certain amount of money on a monthly basis in order to meet the financial demands of individual health plans or expenses entirely tax-free. Not having to pay any tax on this monthly savings makes the money go further, and helps protect the business from spending too much on health coverage.
Employers get to design their own plans, set reimbursement allowances, allow employees to pay for their own insurance and medical bills, and leaves it up to the employee to produce proof of their existence. Once the proof has been established, reimbursement can occur up to the set limit determined by the business.
5. ICHRA
An individual coverage HRA is a health insurance option available to small businesses. This plan has higher reimbursement limits and more flexibility when it comes to designing the plan and reimbursing employees for health expenses. The employer will determine who is eligible, as well as how much tax-free savings are put aside each month in the plan to cover the reimbursement process. Employees can purchase whatever individual plans they want, and submit claims directly to the employer for reimbursement.
This option will give you greater control over your reimbursement amount and help keep coverage costs at a minimum for your business. Although relatively new to the market, this plan is being utilized by small businesses all over the country as a preferred insurance model.
Coverage is Important
The modern business that offers health coverage has an advantage over its competitors. Not only does health coverage offer a competitive edge when attracting candidates, but it also creates a healthier, and therefore, happier workforce.