A Brief Guide to Employee Health Insurance for Employers
If you’re an employer searching for hot new talent for your company, you’ll likely already know that many candidates will be looking for an employer that offers them benefits such as health insurance. While you may not have to provide it by law (if you have fewer than 50 employees), offering health insurance to employees is a great way to boost both engagement and morale, and encourage them to be loyal to your company.
However, there are certain compliance issues surrounding health insurance coverage, and while a payroll and HR provider can certainly enlighten you on them and keep you on the right side of the law, it can be helpful to understand your choices and the laws that apply to them:
QSEHRA - an acronym for ‘Qualified Small Employer Health Reimbursement Arrangement, and pronounced Q-Sara, is a new benefits option benefitting small businesses. It allows small business owners to set aside a sum of money each money that is to be dedicated to employee premiums and medical expenses. The program makes employees responsible for paying their own medical bills or insurance premiums, with their employer later reimbursing them with pre-tax dollars.
ICHRA – standing for‘Individual Coverage Health Reimbursement Arrangement’, this enables employers to provide a monthly tax-free allowance for individual health coverage expenses. Employees can then shop around for insurance outside of an employer’s group health plan or on occasions when an employer doesn’t offer it at all.
Traditional Group Health Insurance – if you’re already a small business employer, you’ll probably be familiar with this coverage, in which businesses work with an insurance company, or use a broker to purchase group health plan coverage for their employees.
Group Coverage HRA – HRAs are employer-funded medical expense reimbursement plans, and they allow businesses to reimburse their employees tax-free for eligible out-of-pocket expenses and health insurance premiums. In many instances, this plan is coupled with a high-deductible health plan, or HDHP. Association Health Plan – another new plan, this allowsa number of small businesses to combine their purchasing power to buy large group coverage.