small business health insurance Archives

HRAs: ICHRA vs QSEHRA

HRAs: ICHRA vs QSEHRA text overlaying image of a clipboard showing ichra and qsehra You’re not the only one who wants to know what the difference is between an ICHRA and a QSEHRA. This is one of the more common questions business owners ask when they’re trying to decide which benefits to offer their employees. Both plans are health reimbursement accounts (HRAs). They make it possible for you, the employer, to give your workers benefits that are both affordable and tailored to their needs. They each let your employees save money exclusively for their health care needs. While ICHRAs and QSEHRAs are similar in what they offer, they work in different ways. Understanding them is the first step in deciding if you’d like to offer one or the other depending on your budget and how you’d like your employee benefits to work.

What are HRAs?

Before we get into these two types of HRAs let’s look at what a standard HRA is. A HRA might be the best way for a small business to help its workers get coverage at a price they can afford. HRAs are not health insurance plans. Instead, they are a way for employers to reimburse their workers for their health care costs that is allowed by the IRS. These are not accounts like HSAs or FSAs. Instead, they are agreements (hence the name), which makes them easier to use than bank accounts.

Employers don’t have to have a pre-funded account for distributing the money, but they can if they want. They keep the money until an employee files a claim for reimbursement. So, if an employee doesn’t ask for reimbursements or doesn’t ask for the full amount, the employer gets the money. On top of that, there are no taxes on the reimbursements!

What Are ICHRAs?

An ICHRA is a tax-free health benefit paid for by an employer that reimburses employees for their qualifying medical costs. With an ICHRA, employers give their workers a tax-free allowance each month to pay for certain medical costs. Employees then buy the health care services and things they want, like individual health insurance coverage, and the company reimburses them up to their allowance amount. Your employees can compare their options for individual coverage on the government health insurance marketplace.

There is no annual limit on how much an employer can contribute, and you can give different classes of workers different allowance amounts. There are two more things to keep in mind. First, employees and their families are only qualified for the ICHRA if they have coverage through a qualifying individual health insurance policy. If the employee or a family member who is part of the individual plan loses benefits, they can no longer get reimbursements.

Second, there are limits on the insurance tax credit in the ICHRA. Specifically, if an employee takes part in the ICHRA, they are no longer qualified for premium tax credits. Because of this, workers are free to opt out of the ICHRA as long as their allowance amount is considered “unaffordable” and wouldn’t provide minimum value under the ACA.

ICHRA Process

Here’s a step by step process for operating an ICHRA.

You set the allowance – The amount of tax-free money you give to an employee for qualified costs is set by you. There can be different amounts for each type of employee. Such as full-time employees, part time employees, seasonal workers, etc. In general, ICHRA allowances for each class of workers should be the same. You can, however, give different allowances within that employee class based on the age of the worker or the size of their family.
Employees receive healthcare – Employees pay for their own health care with their own money. They can buy the health goods and services that are right for them, such as individual health insurance.
Employees submit proof – When an employee has a medical expense, they must show you proof. Such as a receipt or a letter from their insurance company explaining the services they received.
You review – When an employee has a medical cost, they must show you proof. Like a receipt or a letter from their insurance company explaining the services they received.
You reimburse the employee – The company pays back the worker up to the amount of their allowance. Both the business and its workers do not have to pay taxes on these reimbursements, but once the employee’s allowance limit is hit, they can’t get any more reimbursements.

Who Can Offer An ICHRA?

Even though ICHRAs are available to all organizations, a company can’t give both the ICHRA and a QSEHRA. You also can’t offer both an ICHRA and a group health plan to the same group of employees. For example, you could offer full-time employees a traditional group health plan and part-time employees an ICHRA, but you couldn’t give full-time employees an option between the group health plan and the ICHRA; it’s one or the other. ICHRAs are a good choice for businesses with 50 or more workers. Under the ACA’s employer mandate, you must give at least 95% of full-time employees health insurance that meets the minimum necessary coverage. Meaning they include the “10 essential benefits”.

What Is A QSEHRA?

A qualified small employer HRA (QSEHRA) is an official health benefit that has been approved by the IRS. It lets small businesses with fewer than 50 full-time employees pay their workers tax-free for their health insurance premiums and other health-related costs. With a QSEHRA, workers don’t have to sign up for a certain type of health insurance in order to be eligible. This gives them the freedom to choose any insurance plan they want.

Payroll taxes do not have to be paid on any QSEHRA reimbursements by you or your employees. If an employee has health insurance that offers minimum essential coverage (MEC), he or she may not have to pay income tax on reimbursements. Because these reimbursements are not taxed, workers don’t have to count their QSEHRA as income at the end of the year. Unlike traditional group health insurance, the QSEHRA doesn’t have minimum employer contribution limits. This means that you can give this benefit to your employees even if you don’t have a lot of money, but there are limits on how much you can give.

Also, there are no participation requirements to offer a QSEHRA. So you don’t have to have a certain number of workers registered in the benefit in order to offer it. Employers can set monthly budget caps with a QSEHRA, which gives them full control over their costs. Once the limits have been set, they can’t be broken. Also, because a QSEHRA doesn’t need to be pre-funded, costs are only paid out when an employee has a qualifying expense. Any money that isn’t used stays with you.

Who Can Offer a QSEHRA?

For your company to be qualified for the QSEHRA benefit, it must have fewer than 50 full-time employees. According to the Affordable Care Act, if you have 50 or more full-time employees, your company is a large employer. This means you can give an individual coverage HRA (ICHRA), but not a QSEHRA. In addition to having to be a certain size, an eligible employer cannot give a QSEHRA and any other group plan at the same time. If an employer wants a QSEHRA and already has a group health insurance policy, they can cancel it and become qualified.

Which Is Better For My Business?

If you want to use an ICHRA or a QSEHRA, you need to think about a few different things. You should start by thinking about your workers and what they need. Benefits are used by many employers as a way to keep good workers and attract new ones. Your benefits should be as personalized as possible to the people on your team. An ICHRA is likely your best choice if you want a more flexible health benefit. Such as more customization with employee classes, no limits on yearly contributions, or meeting the employer requirement.

But a QSEHRA is the way to go if you want a health benefit that is less expensive than group health insurance, easy to set up and run, and works for qualified small employers with less than 50 workers. No matter which HRA you choose, you’ll be picking a customizable health benefit that will give your workers more control over their own healthcare decisions while saving your company money.

Working With EZ

HRAs are a great way for employers to help their workers’ pay for medical costs they have to pay for on their own. Employers can keep costs down while giving their workers a perk that lets them pay for their own medical care. There are different kinds of HRAs, so most businesses will be able to find one that works for them. This is what makes HRAs so special and why they are becoming more and more popular. We’re also here to help if you need help figuring out the complicated world of insurance.

If you want to learn more about your choices for group insurance, you can get in touch with us at EZ. We’ll put you in touch with a highly trained person who can help you decide if an HRA is right for you and your business. You’ll save time, never have to deal with trouble, and never have to pay for our services. EZ.Insure will put you in touch with a specialized agent for free, so let’s get started! Put your zip code into the box below to get a price right away. Call 877-670-3531 to talk to your own agent.

What Will Employer Healthcare Costs Look Like in 2021?

If there’s one thing that we can all agree on, it’s that 2020 has been an unusual year, especially when it comes to healthcare. We’ve seen a once-in-a-lifetime pandemic, and we still don’t know what all the effects of it will be. Take, for example, costs for employer-based healthcare. If you’re an employer, you’re right to be wondering where your health costs are headed in 2021 – will they skyrocket? Level off? Maybe even go down? Unfortunately, the answers to these questions are not as clear-cut this year as they have been in previous years, but we can take a look at what some experts are projecting, as well as what you can do to help keep costs down.

This Year’s Cost of Care

piles of hundred dollar bills strapped together by a band laying on top of each other — *Healthcare costs have surprisingly been down this year; spending anywhere from $75 billion to $575 billion less than expected.*

To get a better idea of why predicting healthcare costs for 2021 has been so difficult, we need to take a look at what healthcare costs have been like this year. As you might expect, dealing with the coronavirus is expensive: California’s state ACA Marketplace, Covered California, estimated that the costs to test, treat, and care for coronavirus patients this year will be between $34 billion and $251 billion; America’s Health Insurance Plans predicts the cost will total $56 billion to $556 billion over a two-year period.

Even with those astronomical numbers, we can’t simply jump to the conclusion that insurance costs are going to skyrocket next year. It looks like the total costs of healthcare in the U.S. are actually down this year; in fact, one estimate is projecting that we will have spent anywhere from $75 billion to $575 billion less than expected on healthcare by year’s end. One actuarial firm is even saying that some self-insured employers could see a 4% drop in healthcare costs in 2021. How can that be? While the coronavirus has been an unexpected expense, in some cases, it has been balanced out – or even cancelled out – by the fact that many people are postponing or cancelling regular clinical care and elective treatments due to coronavirus.

But before we get too excited about a possible drop in healthcare costs, we need to look at what the experts are predicting. And, like everything else this year, it’s unusual: there are multiple possible scenarios for how much employer healthcare costs will rise.

Multiple Scenarios

3 arrows pointing in different directions — *So far, there are 3 possible scenarios as to how much healthcare costs will be next year.*

Medical costs are one of the most vital bits of information for insurance companies as they figure out plan costs for the coming year. With this year being so much in flux, it is unclear what insurers are going to do; in fact, business advisory giant PricewaterhouseCoopers (PwC) has taken the unusual step of offering multiple scenarios for what could happen to employer healthcare costs in 2021. “This is an unprecedented report for us,” said Ben Isgur, leader of PwC’s Health Research Institute. “In the 13 years we have been doing this, we made a projection of the coming year and never felt the need to do scenarios.” Their 3 scenarios for 2021 are as follows:

Medical spending continues to stay low, with people opting out of non-coronavirus related care. In this scenario, costs would only rise by about 4%, which would be one-third lower than the average growth over the last five years.
Medical spending could be “medium,” and costs would rise at the same rate as they did from 2014 – 2020: around 6%.
Spending could be very high and result in a 10% increase in costs.

These numbers might not be across the board for all businesses in all areas: it might depend on where they are located and how much the coronavirus has affected their area. For example, businesses in an area that has been relatively unaffected by coronavirus will most likely see the usual increase of about 6%, while those with a surge in the virus, but a drop in people seeking care for other things, could see a rise closer to 4%. But if all of this other medical care gets pushed into next year? Then we could see a rise in healthcare costs of around 10%, which would mean the highest rate of medical-cost inflation since 2007.

For now, it does look as if some insurers are raising rates, and these increases seem to vary by plan type. For example, recent filings with the District of Columbia’s Department of Insurance, Securities and Banking related to small groups for 2021 show that Aetna filed for an average increase of 7.4% for health maintenance organization (HMO) plans and 38% for preferred provider organization (PPO) plans, while UnitedHealth proposed an average increase of 17.4% for its two HMOs and 11.4% for its PPO plans. They may be anticipating a surge in claims as 2021 gets underway.

A Surge Next Year?

graph of money bars going up with a red line moving upwards across the top of each bar — *Insurance costs could skyrocket next year due to people not getting treatment.*

What many employers are concerned about now is that final, high-spending scenario. With so many people putting off necessary treatments, insurance claims could skyrocket in 2021 as people get sicker. Skipping out on preventive care could also present a large problem, as people may miss out on being diagnosed with underlying issues. “[Employers are] worried that some of these elective procedures will simply be bunched up next year and some people will be sicker next year … because certain things weren’t detected earlier,” said James Klein, American Benefits Council president.

Other things that could drive up costs? Increased coronavirus testing as employees return to work, prescription drug cost increases as pharmaceutical companies work on coronavirus treatments, and higher operating costs for hospitals and physicians as they try to keep up with the need for protective gear. Finally, let’s not forget that, as people struggle with isolation and anxiety, mental health costs will probably continue to rise – and now is certainly not the time to skimp on mental health care benefits for your employees.

What You Can Do

If costs do end up rising significantly, it might seem like the best thing to do would be to choose plans with higher deductibles or contribute less to employees’ premiums, which would pass some of the costs onto them. This may help to reduce your spending in the short-term, but it’s probably not the best long-term strategy. Studies show that putting more of the cost of healthcare onto your employees actually discourages them from seeking preventive care: for example, families with a higher deductible are less likely to take their children to see the doctor, even if the visit is free. In the long run, this could mean that your employees and their families will be less healthy, which could mean higher healthcare costs.

So what should you be doing to help manage healthcare costs and keep your employees healthy? Here are a few strategies:

Probably the best thing that you can do right now – and continue to do in the future – is to offer telemedicine as an option to your employees. Virtual healthcare exploded in popularity during the pandemic, and many patients love its convenience, while many employers love how cost-effective it is. Speak with your insurance company and make sure that they will continue to cover it – and encourage your employees to take full advantage of it.
Healthcare technology doesn’t have to end with telemedicine. You can offer “virtual chronic care solutions,” which can reduce the need for regular doctor visits. This could include things like Bluetooth-enabled glucose monitors that link with smartphone apps.
Instead of raising costs for your employees, try narrowing the network included in your plan. If your employees are already happy with their covered doctors, it may not be necessary to include a wider range of providers.
Speak to your insurance company, or one of our knowledgeable agents, and have them help you examine your employees’ healthcare costs. For example, are their providers jumping right to expensive tests and surgeries, or are they more likely to start with effective preventive measures?

The only thing we know right now about 2021 healthcare costs for employers is that we don’t know a whole lot. Right now all you can do is move forward on the assumption that costs will go up, as they do every year, and try to find ways to keep costs down. The best way to do that? Contact EZ, and speak with one of our agents. They can give you cost-saving tips, and can also find you a great plan at a great price – and they’ll do it all for free. To get started, enter your zip code in the bar above, or to speak with an agent directly, call 888-350-1890.

Small Business Group Health Insurance FAQ

Starting a small business is a great accomplishment! It takes a lot of hard work, and you probably have a to-do list a mile long. One very important thing on your list should be finding a great group health insurance plan. Offering health insurance to your employees leads to so many advantages for your business, like healthier, happier employees who are more likely to stay in their jobs, and tax breaks for you. There are many high-quality affordable plans to choose from, but you might be wondering where to begin, and you’ll probably have a lot of questions as you search for the right one for your business and your employees. That’s where EZ comes in: we’ve also got the answers to your most frequently asked questions and can give you a free quote to help you compare local group health insurance plans from all of the top carriers.

illustration of a woman with a headset on with her hand out and money floating over it — *An agent will be able to offer you exclusive deals and promotions from insurance companies.*

Should I use an agent or broker?

Both insurance brokers and insurance agents act as the middlemen between insurance buyers like you, and insurance companies. Using an insurance agent, like one of EZ’s, is the best option for small business owners looking to purchase a healthcare plan. Agents can expedite the buying process, they have specialized knowledge about the policies they sell, and they can keep you up-to-date on any changes to your plan. Our agents also have access to exclusive products from the top-rated insurance companies, which can save you more money than if you go it alone.

What is the minimum number of employees to get a group plan?

If you have 50 or more full-time employees, you are required to provide health insurance or you will be penalized under the employer mandate of the Affordable Care Act. You are eligible for a group plan as long as you have 2 full-time (or full-time equivalent) employees, including yourself. Full-time employees are considered those who work 30 hours or more a week.

The 2-employee rule is always true for tax-advantaged small business health insurance options program (SHOP) plans (although you will need 70% participation in your plan). If you’re looking into other group plans, some insurance companies may have different requirements. Ask one of EZ’s agents to check for you.

What is the average cost for a group health insurance plan?

Small business health insurance costs are determined by your location, number of employees, and how much you would like to contribute to your employees’ coverage. The average cost of annual premiums for employer-sponsored health insurance was $7,188 for individual coverage and $20,576 for family coverage in 2019. The average annual deductible amount for individual coverage was $1,655 for covered workers.

SHOP plans, as mentioned above, can offer some savings through the small business health insurance tax credit, if you have fewer than 25 full-time employees and meet certain requirements. Speak with an EZ agent about this possibility, or use our online tool to check fast, no-cost quotes for all available plans. We can help cut costs – but not benefits – by comparing multiple plan options.

How do I communicate the new benefits to my employees?

Simple, just ask your EZ agent! EZ’s agents are experienced in helping you communicate new benefits to your employees. Our agents will provide a Summary of Benefits Coverage (SBC) to participants and their beneficiaries before enrollment in the plan, at renewal of the plan, within 90 days of a Special Enrollment, and within 7 business days of a written request. They will also help you provide each employee covered under the plan a Summary of Material Modification (SMM) when there are changes made to their health benefits.

How much do I charge employees to be on the plan?

red "50%" sign — *Employers are required to contribute at least 50% of their employee’s health insurance premiums, but you can contribute more.*

Employers are required to contribute at least 50% of each employee’s health insurance premiums. On average, employers contribute approximately 82% of individual insurance premiums, and around 71% of family plan premiums. The more that you contribute to your employees’ premiums, the more likely employees are to enroll, and the more you will save – and don’t forget all of these contributions are tax-deductible!

You have options when it comes to plans and premium prices, so talk to an EZ agent about what’s best for you and your employees. For example, if you choose a plan with a low deductible, but higher premium, you may not be able to contribute more than 50%, and your employees might find it too expensive to enroll in your plan. In this case, you might want to look into a high deductible health plan, which would allow your employees to contribute to a health savings account (HSA). An EZ agent can help you determine how much you can afford to contribute, and other ways you can save!

Will offering health insurance help me attract better employees?

Businesses that offer health insurance tend to attract and recruit the best candidates. Most job seekers won’t even look twice at a posting if an employer does not offer health insurance – job seekers want to know that a prospective employer is willing to invest in them. Surveys show that 46% of job seekers said that healthcare was a deciding factor in taking a job, and that 60% of employees would take a job with lower pay but better benefits.

Will my employees be happier if they have health insurance?

Offering health insurance can mean having more loyal employees and a lower turnover rate. 83% of employees say health insurance is extremely important when deciding whether or not they should change jobs. Employees with health insurance are happier, less likely to leave their jobs, and healthier.

One survey found that 72% of employees said having more work benefits would increase job satisfaction. Knowing that they will be protected in case of an emergency, that their chronic conditions will be covered, and that they will not have to worry about large medical bills, means less stress for them and more productivity for you.

Will productivity go up if we offer health insurance?

Absolutely! In one recent study, 60% of employers said that offering health insurance led to higher productivity levels at their businesses. Not only will offering health insurance to employees lower their stress levels, but it will also keep them healthy – and healthier employees are less likely to take time off for being sick. When you invest in your employees, you’re boosting your bottom line.

What other benefits should I consider offering?

caucasian man laying in bed with the laptop on his lap with a doctor on the screen. — *Offering telemedicine to your employees is a great benefit that can help you save money.*

When choosing a plan, look at what “extra” benefits it offers – for example, telemedicine. This convenient option can actually save you thousands due to the reduced cost of healthcare claims from unnecessary visits to the doctor and reduced visits to the emergency room. It is more convenient (and less expensive) for employees to call and speak with a doctor to receive care.

You can also consider offering a workplace wellness program. These programs help keep healthcare costs down by giving incentives to employees to live healthier lives. These programs can include things like health screenings, programs to quit smoking, gym membership stipends, diet and weight loss programs, or diabetes management programs. To find out what extra benefits you can offer, talk to an EZ agent.

How will I know if my doctor and my employees’ doctors are in-network?

If you are looking for a plan that includes specific doctors, speak to an EZ agent to find a plan that includes the best network for you and your employees. Our agents can easily access any insurance company’s networks and included providers in minutes.

If you already have a plan, check your plan info to see if there’s a list of covered doctors. You can also call your doctor’s office, ask for their tax ID number, and then call your insurance carrier to find out if they are covered. Or you can avoid this long and annoying process by simply asking one of EZ’s agents to check for you!

EZ.Insure understands how time consuming and overwhelming finding a group health insurance plan for your small business can be. To make the process easier, we provide you with a personal agent who will answer all of your questions, compare plans, and provide you with free, instant, and accurate quotes. We do all the heavy lifting for you so that you can provide the best insurance for your employees, without breaking the bank. Let us help you save time and money. To get started, enter your zip code in the bar above, or to speak to a specialized agent within your area, call 888-998-2027.

Survey Says: Find Out What Benefits Employees Want

If you run a small business, odds are you’re on a tight budget. But you’re still looking to recruit and keep the best employees. So you may have to make choices when it comes to the compensation you offer your workforce. Should you pay them a little bit more? Should your benefits package be more generous?

drawing of a blue wallet with cash sitcking out of it. — *If you are on a tight budget considering ways to make employees happy, syrvets show they would prefer health insurance over more pay.*

While your first instinct might be to think most people would choose extra cash, most employees would actually choose more perks, most notably healthcare coverage. It is worth your time to ask your employees what perks are most important to them, and to survey them about their healthcare priorities.

How Valuable Are Benefits?

Consider this: various studies have been done asking employees whether they would prefer better benefits or more pay, and the results are clear. The tests might be different but the results were the same: around 80% chose benefits over money. Employees feel happier with their job and are more likely to stay (or join your team) if they are offered perks that improve their lives and make them feel valued.

Some of the things you can offer are relatively low-cost, such as more vacation time, more flexible hours, or work-from-home options. However, the most coveted benefit is also the most expensive: healthcare.

What Employees Want Most

young caucasian woman in light vlue button up with side braid and both thumbs up. — *Healthy employees who feel valued are going to be more productive and loyal.*

If your business has fewer than 50 employees, there is no law requiring you to offer group health insurance. However, studies about employee benefits also show that what workers want most is health insurance. While paid time off was an obvious second-runner up, a majority (at least 40%) said that healthcare was their top priority in all studies.

So if you’re feeling pulled in all directions financially, this is a clear indication that your money is best spent on offering a group health plan to your employees. After all, healthy employees who feel valued are going to be more productive and loyal – not to mention there are perks in it for you, too (like tax advantages).

Take the Time to Ask

As stated above, it just so happens that the most desirable benefit is also the most expensive. But there is an often overlooked way to find the best plan for your employees: a health benefits survey. If you find out what your employees’ wants and needs are, you can then find a plan that is as tailored to them as possible. You will also get more accurate pricing if you know exactly what you are looking for, and will save money by cutting out any unnecessary extras.

Making an Employee Healthcare Survey

How do you go about making a healthcare survey for your employees? The first thing to remember is that, because of HIPAA (Health Insurance Portability and Accountability Act), you cannot ask them specific questions about their health. The survey must also be anonymous. Think questions related to the type of coverage they want. Here are some examples:

paper with green checkmarks on it and lines with a pencil over it. — *Make an employee health insurance survey but make sure to not ask specific questions about their health.*

How important is it that your employer offers health insurance to you? You can then ask them to rank their answer based on a number scale or from “not important at all” to “very important”

How much would you be willing to spend each month for health insurance coverage?

Would you prefer paying more each month for insurance but paying less when you see a doctor? Or would you prefer paying less each month and more when you see a doctor? You may be able to offer them a high deductible health plan that includes a tax-advantaged HSA.

What type of network of doctors and specialists would best meet your needs? You can ask them if they would be comfortable with a smaller local network instead of a larger or even nationwide network.

Are there any doctors or hospitals that you would specifically like to be included in your healthcare network?

How many family members would you like to cover with your plan?

By taking the time to ask the simple questions above, you will have a good idea of where to start when looking for a plan to cover your employees. Offering the right benefits might seem like an expense or a headache, but it can make all the difference in finding – and keeping – the right employees. And remember, EZ.Insure is here to help you every step of the way with finding the right plan for you and your employees. We can connect you to your own personal agent who will steer you in the right direction – for free! You will never be hounded by endless calls and you will always get the most accurate information. We promise everything will be quick, easy – and did we mention, free? To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing or calling 888-998-2027.

Cigna Links Up With Upstart Oscar For Small Business Health Insurance

Cigna, and small startup insurance company Oscar are teaming to begin offering small business health insurance options that are fully insured. The plans will be branded as Cigna + Oscar, and both companies will share risk equally. The plans are set to begin selling in 2020.

chains connected together by one red link — *Cigna and Oscar Health link up to provide better small business health insurance plans.*

Oscar’s Start-up

New York based Oscar Health started out small in 2012, and has slowly expanded to different states. They offer individual market plans, and expanded to offering small group and Medicare Advantage plans. Just this past August, the company has expanded to 6 new states in the US, and grew to 400,000 members this year.

Unfortunately, Oscar does not provide vision or dental insurance. However, the company is hoping that partnering with Cigna will change this.

empty dentist patient room — *Small business health insurance does not generally cover dental and vision. Hopeful the merge provides these benefits.*

“Small businesses are the backbone of the American economy and through this partnership, we can take a disciplined approach to offering differentiated healthcare solutions that help small businesses save money, expand network and product choice and keep employees healthy,” Julie McCarter, vice president of product solutions at Cigna, said in a statement.

How Small Businesses Can Save

Small businesses do not necessarily have to offer health insurance to their employees. It can become too expensive for the business. However, with this new merge, this will open the door to small businesses being able to afford healthcare coverage for their employees.

silhouette of a group of people with a huge red heart behind them in the background. — *“Together, we are giving small business owners an affordable, simple-to-use option.”*

“Together, we are giving small business owners an affordable, simple-to-use option that makes it easier for their employees to get appropriate care quickly and stay healthy,” Oscar Chief Policy and Strategy Officer Joel Klein said in a news release. “Cigna + Oscar will give these business owners and their employees consumer-centric health care coverage and physician networks that provide personalized care.”

The plans will include medical, behavioral health, and pharmacy services. Telemedicine will also be provided at no cost 24/7. This will help employees with the ability to call and speak with a doctor. They will also get their medicine quicker than going into the doctor’s office.

Although Cigna is not one of the largest 3 insurers in the small group market, they do offer group insurance to employers with 50 or more employees. The company is hoping tha partnering up with Oscar will help the company grow more and bring in more revenue. Together, the companies can do more in smaller markets than they would have been able to do alone. Let’s hope the future is bright for small businesses, and more importantly their employees receiving health insurance!

Are Employers Required To Offer Health Insurance?

Medical costs in the U.S. are high, which is why a lot of employees look for a job that offers health insurance. Over 88% of people consider health insurance benefits when choosing a job. For companies, providing group insurance to

cartoon of a man in a suit pointing at a clipboard with magnifying glass over a certain part. — *There is no specific law that requires employers to provide health insurance coverage to their employees, but there is a penalty.*

employees costs a lot of money, so some companies opt out of providing insurance. But are they required to? Yes, and no.

Affordable Healthcare Act

There is no specific law that requires employers to provide health insurance coverage to their employees. However, in January of 2015, the Affordable Care Act, ACA, required that employers who have 50 or more full-time employees provide health insurance. If they do not, they will face a tax penalty.

According to the ACA, full-time employees are employees who work an average of 50 hours a week.

Group Insurance Penalties

If a larger company with 50 or more full-time employees does not offer health insurance, they are subject to IRS penalties.

The IRS will penalize the company if one or more of their full-time employees gets a premium tax credit for getting their own health insurance coverage from the Marketplace. The company can owe up to $2,500 for each employee.

The company must offer insurance to 95% of their employees to avoid a penalty, and it must be year round. If the business offers healthcare for some months, and not others, then they will face a portion of the annual penalty.

Small Businesses

people working inside many cubicles. — *Small businesses (less than 50 employees) do not have a penalty if they do not offer health insurance to their employees.*

Small businesses are not required to offer healthcare coverage to their employees. Since they have less than 50 full-time employees, they will not face penalties. If a small business does not offer health insurance, then a person can seek their own health insurance plan from the Marketplace or a private company.

While there is no longer a penalty for going without healthcare coverage, it is important to seek out information on different plans. There are plans within your budget that will meet your needs and lifestyle. If you need help searching and comparing all the group insurance plans around, EZ.Insure can help. We offer local specialized insurance agents that can do all the comparisons for you, and just provide you the quotes. All for free! It’s that simple. To begin, enter your zip code in the bar above, or to speak to an agent, email [email protected], or call 888-998-2027. There is no hassle involved, and no obligation to buy, and no headaches. Just easy, fast, and free quotes!

Tag: small business health insurance

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