Small business owners aren’t insurance experts and they shouldn’t have to be. Many businesses are so small that the folks in charge of evaluating benefits packages are sometimes in the dark about the myriad compliance requirements surrounding health insurance coverage. Even though small businesses that employ fewer than 50 full time employees aren’t legally bound to offer health insurance, many of them offer coverage to improve employee engagement and morale and also to attract the best talent. So, if your company plans to provide health insurance for your employees, it’s important that you understand your choices and the laws around them.
If you’re looking to offer health insurance in 2020 you should consider adding these five popular options to your benefits plans:
- QSEHRA – A Qualified Small Employer Health Reimbursement Arrangement, pronounced Q-Sara, is a new benefits option that has been beneficial for small business…that are aware it even exists. The arrangement lets small business owners put aside a set sum of money each month for employee premiums and medical expenses. Under this program, employees are responsible for paying they own medical bills or insurance premiums, but the employer then reimburses the submitted expenses with pre-tax dollars.
- Traditional Group Health Insurance – This is the standard group health coverage that everyone’s familiar with. Businesses either work with an insurance company itself or use an insurance broker to purchase group health plan coverage for all of their employees.
- Group Coverage HRA – An HRA is an employer-funded medical expense reimbursement plan. It allows a business to reimburse its employees tax-free for eligible out-of-pocket expenses and health insurance premiums. It’s most often paired with a high-deductible health plan (HDHP).
- Association Health Plan – This is another new type of plan that allows several small businesses (those that are either in geographic proximity or in the same industry) to band together and gain the purchasing power needed to buy large group coverage.
- Taxable Stipends – These aren’t insurance programs, but rather a method that employers can use to help employees pay for their individual healthcare plans. The employees receive a bump in their paychecks or a lump sum at the beginning of each year (which is considered taxable income). Since it’s not an insurance plan, there are no compliance headaches to worry about, but it’s important to keep in mind that you can’t force the employee to use the money for insurance and you can’t ask them what they spend it on.
State Health Insurance Laws
So, when it comes to compliance when offering insurance, not only do businesses with 50 or more employees need to concern themselves with federal law around health programs, but they also have to be familiar with laws of the states they operate in.
Pro Tip: familiarize yourself with your state’s Department of Insurance to remain complaint.
Paycor Can Help
If your company decides it’s ready to provide health insurance for your employees, make the task much easier. Paycor’s Benefits Administration Software is the more efficient way to get all of your people on board so you can get back to focusing on your HR strategy.