group health Archives

The Pros & Cons of ICHRAs

Individual Coverage Health Reimbursement Arrangements, or ICHRAs, have been available since January 2020, and have been growing in popularity over the past year. This is because they allow employers to save money while offering employees a way to get healthcare benefits. They are a great alternative to group health insurance, especially since the rules surrounding them are less restrictive than those surrounding traditional healthcare plans, or even those of other HRAs. For example, there are no contribution maximums and no company size restrictions on ICHRAs. Before deciding if an ICHRA is right for you, you should first weigh the pros and cons.

ICHRA Pros

tax free written on a blackboard in white and yellow — *All reimbursements for each employee are tax-free.*

ICHRAs are a type of health reimbursement arrangement, a health benefit that differs from an HSA in that it is an arrangement, as opposed to an account. Employees don’t put money aside for their healthcare expenses; rather, you reimburse them for their medical expenses. You provide a set monthly allowance for employees’ premiums and medical expenses. ICHRAs have a lot of advantages for both you and your employees, including:

You can choose how much you want to contribute every month, and there is no minimum or maximum. Once set, you will give that amount to employees monthly; they cannot exceed that amount, which will help you budget accordingly.
Reimbursements are tax-free.
You can offer different monthly allowances to different groups of employees based on the type of job they do, how many hours they work, and even family status.
Employees use the money you offer them to find an individual healthcare plan that suits their needs. This is empowering to them, and will allow you to focus on your business instead of trying to find a group health insurance plan that fits all of your employees’ needs.
Employees need to have an individual insurance policy to participate in an ICHRA, so if you enroll and start reimbursing employees mid-year, employees will become eligible for a Special Enrollment Period to choose a major medical health insurance plan. This means that they will not have to wait until the Open Enrollment Period, November 1- December 15, to buy a health insurance plan.

ICHRA Cons

There are many positives to offering an ICHRA, but sometimes with the good comes some bad. The disadvantages of ICHRAs include:

red warning sign — *Employees who are on their spouse’s health insurance plan cannot participate.*

This type of arrangement prevents employees from being eligible for advanced premium tax credits on ACA Marketplace plans. So if an employee decides not to take part in an ICHRA that is considered “affordable,” they will not be able to receive tax credits with an ACA plan.
Employees who are on their spouse’s health insurance plan cannot participate. The only way to participate is if they purchase their own individual health insurance and get reimbursed for it through the HRA.

Need Help?

For many employers, ICHRA pros outweigh the cons and can seem like a no brainer, which is why they are growing in popularity. You get to help your employees purchase health insurance plans that meet their specific needs, and you also get to save money in the process. Reimbursements are tax-free for both employees and employers, meaning that they are tax-deductible for employers, and income tax-free for employees, which will save you on employer payroll taxes. It’s a win-win situation.

If you are interested in an ICHRA, or want to explore your options for a group health insurance plan, reach out to an EZ agent in your area. Our agents are highly trained and work with the top-rated insurance companies in the country. We can assess your needs and compare plans instantly, for free. To get started simply enter your zip code in the bar above, or to speak directly with a local licensed agent, call 888-998-2027.

Employee Assistance Programs 101

Employee Assistance Programs (EAPs) have been around for longer than you might think, and have an interesting origin. They began in the 1940s as programs to help combat employee alcoholism, and from there the Employee Assistance Program evolved to help employees manage daily challenges in work and life. Maintaining a healthy work life balance can be difficult for many employees, which can cause stress, affect well-being, and lower productivity levels. As an employer, an EAP can be a major benefit to you; having one in place can help keep your employees healthy and happy, which will in turn help boost your bottom line. Before you can decide whether an EAP is right for your business and your employees, you need to know exactly what they are and what you can offer your employees through them.

What Is An Employee Assistance Program?

EAPs are voluntary benefits that employers can choose to offer. You are not required to provide them, but they can be useful. Not all Employee Assistance Programs offer the same services, but services offered can include:

Counseling for personal and work-related issues, including anger management, anxiety, depression, substance abuse, psychological problems, psychiatric disorders, chronic disease, stress management, and grief.
Training and development for things like communication skills, conflict resolution, team-building, leadership coaching, and more.
Resources and referrals for childcare, and other forms of care.
Financial or legal resources for planning, retirement, divorce, custody cases, debt, and more.
Access to wellness programs such as those for weight management and substance abuse, as well as gym memberships.

Services provided are free to employees, and sometimes for their families, as well.

Why Offer an EAP?

According to the Journal of the American Medical Association, in 2003, U.S. companies lost more than $44 billion due to low productivity related to employee depression. Companies also lost $100 billion annually, or $3,000 per employee, because of substance abuse and mental illness. If you can help your employees manage their stress, you can help avoid this decrease in productivity.

blue arrow going downward with a blue background. — *Employee Assistance Programs will help decrease turnover rate of your employees, as well as absenteeism due to stress.*

Employee Assistance Programs provide emotional support and help employees maintain a healthier lifestyle. Employees can meet with EAP consultants by telephone or in person for assistance with problems that keep them from doing their best. Offering an EAP can increase employee satisfaction and productivity, while decreasing:

The cost to your business of employee stress
The risk of workplace violence
Turnover
The risk of litigation
Absenteeism

Determine What To Offer

Your employees have different needs, so it can be difficult to determine which benefits to provide. In order to determine which services to offer, you should conduct a healthcare survey. Ask your employees what matters most to them, but remember to keep it confidential.

The well-being of your employees matters. There are a variety of Employee Assistance Programs to choose from, and even some comprehensive group health insurance plans that offer some of these services. EZ can help sort through all of your options. Our highly-trained agents can assess your business and what your employees need. We will provide you with guidance to find a great plan that works for everyone and will save you money. To compare quotes instantly, simply enter your zip code in the bar above, or to speak directly with an agent, call 888-998-2027.

HSAs: What They Are, and Why You Should Be Using Them.

Do you know about Health Savings Accounts (HSAs)? According to surveys, about half of Americans have no idea what they are, or what to use them for. This situation isn’t good considering how present medical expenses have a crippling effect on the average person. If your employees are hospitalized from a serious injury, the resulting bill can equal the cost of a family sedan. Help them understand what these are, so they’ll opt into your group health plan.

HSAs are a great solution for these high payments, but not if people don’t know how to use them.

What is an HSA?

blue piggy bank for a health savings account — *Saving money is good just in case something happens, but what if you had an account that was ALSO tax-advantaged?*

HSAs were created to help pay for medical expenses that your health insurance plan doesn’t cover. These savings accounts are only compatible with high deductible health plans that are specifically tagged “HSA-eligible.”HSAs are tax-advantaged, giving you more of a reason to use them. On this note, if you make a withdrawal from the account to pay for a qualified expense, then the amount will not be taxed.

If their deductible is $1500, and your medical expense is $4500, then you will be expected to pay the $1500 deductible, and your insurance company will take care of the rest. For some, $1500 is still a lot of money. With an HSA in place, you can cover that as well.

Either you, or your employee, or both, will put money into the account. While HSAs can be opened by yourself, starting one with an employer will help it grow faster with you both making contributions. These are saved up to pay for things like dental work or prescription drugs to make you feel better.

How Do You Start One?

Before starting an account, your employees have to meet the requirements. This is easier if you have a high-deductible health plan (HDHP). With the HDHP, they often are bundled with an HSA, or at least give you the option.

Besides the basic stuff, you won’t qualify if you:

Have other health coverage
Are considered a dependent
Are enrolled in Medicare

How Do You Use It?

Let’s say an employee started their HSA, saved money with it, but now an urgent medical need arises.

We’ll say this urgent need is the medicine to help their recovery. Thankfully, the IRS approves this for HSA spending. Make sure to double-check though. No one wants to pay a 20% surprise tax when you file your taxes later.

stack of coins for HSAs — *If you open up an HSA with your employer, they can help put money in the account too. That’s twice the contributions!*

That being said, they have options with spending your HSA. They can either get a debit card for it from your bank or insurance company, or you can ask for a reimbursement.

No matter which place they go to, they will have experts to help explain everything. After they use these accounts to save money, they can withdraw from it to pay for qualified medical expenses. In the long run, these expenses will cost less because the HSAs are tax-advantaged.

HSAs seem fairly easy, but most people have no idea how to use them. Many insurance providers will not give HSAs the time of day, just throwing them in like a less useful option. As savings accounts go, they are specific to medical expenses, and those are restricted even more by the IRS.

We can only assume that their extreme restrictions and mystery are a cause for people not using HSAs properly, if at all. Don’t miss out on the opportunity to help your employees pay for hefty medical expenses without going bankrupt. Do some research and ask your insurance company or bank about these benefits.

If you are stuck, don’t know where to start, or have issues, don’t worry. EZ.Insure offers solutions. Your agent will answer any questions you have, compare the plans available to you, and even sign you up when you are ready, free of charge. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-998-2027. EZ.Insure makes the entire process simple, easy, and quick.

Employer Health VS Individual Plans: Which Should You Use

When you start a new job, you might be offered group health insurance. Employer health insurance is usually cheaper than an individual plan, which is why an attractive benefits plan is such a big deal.

However, the plans they offer could potentially cover less than what you need. In some circumstances, you can (and should) buy health insurance on your own. When making this choice, you have a lot to keep in mind, like what are their differences, and which one is better for you?

Individual Health Insurance Plan

When you look into individual or family health plans, you have the option to compare companies and their plans, then choose which one best fulfills your needs. With private insurance, you have more control over your options. These plans can be bought through the Marketplace, or directly from the insurance company via online, an agent, or broker.

The biggest advantage of an individual plan is its flexibility. This flexibility extends to your career too. You won’t have any formal insurance ties with your employer. That way if you leave or change jobs, you won’t have to worry about losing coverage.

The flexibility also goes with medical networks. You can choose a plan that includes your current doctors and hospitals. After you review your network, make sure you know when to renew or change your plan during the annual Open Enrollment period.

group of papers and folders for employer health — *Healthcare can take a lot of research to find the right plans. Lucky for you, EZ.Insure can do most of that for you!*

Employer Health Plan (Group Plan)

The biggest pro for employer health is how much they take off your hands. A company will do its own research, comparing the best plans in their area for employees. After purchasing a plan, the employer shares the premium cost with you. What this means is that they can get a better deal for group insurance and then help you pay for it.

As mentioned, this coverage will only be available to you when you stay with the company, so the moment you leave or are let go, the coverage ends. Also note that if their plan doesn’t include your usual doctor, you will have to choose between changing networks, or keeping your individual plan.

Other advantages of a group plan are as follows:

The company has done the research and picked the plan options already. Group health plans are guaranteed-issue, which means there is no medical underwriting.
Contributions toward your premium from your employer are not subject to federal taxes, and your contributions can be made pre-tax. This will lower your taxable income.

What It Comes Down To

Deciding whether to seek out your own individual family plan or go with an employer’s can be confusing. Your employer may not offer plan options that suit your needs. There are differences within the price, benefit options, and flexibility, not to mention the overall increase in insurance rates.

Over the years, employer insurance has seen premiums increase by about 3% for individuals and 5% for family plans, while individual health plans have increased by about 4%.

document with glasses for employer health — *Still confused about a policy type? After you gather your info, give us a call and let us help you find the best coverage.*

The average annual premium for an employer-sponsored plan is $1,242 for an individual. Compare that to the individual market, which has an average individual premium of more than $5,000 annually. This can be great (and saves you money), but there is a possibility you can find a plan for cheaper on your own.

Individual plans would be the way to go if you want to shop for the plan that exactly matches your needs. That way, you are in control of the costs and the coverage that you get. You will not have to worry about losing your plan if you lose your job or change jobs.

Group plans would be the way to go if you want to save money and are happy with the plan they offer. Their plans are also guarantee-issue, which is great if you have a pre-existing condition. If you seek an individual plan with a pre-existing condition, you can be denied, or it will be expensive. Some employers do offer incentives that lower premiums, such as quitting smoking or getting a gym membership.

All in all, the choice needs to be yours. What it comes down to in the end is what your needs are and the costs. While your boss could offer a plan that you think is too expensive, your individual plan may be even more costly.

Don’t stress out and overthink if you should opt for your employer’s plan or buy your own. If you want to seek what health insurance options are out there, EZ.Insure has your back. We will provide you with a trained agent within your region who can compare all available plans and their costs. This should make the process easier when it comes down to making a decision to go with your employers plan or not. For free quotes, enter your zip code in the bar above, or contact an advisor by calling 888-350-1890, or emailing [email protected]. Life is stressful enough, let us take some of the load off of you.

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