Small Business Health Insurance Options

For a small business, health insurance can be a complicated, sensitive topic but it’s important and substantial in today’s American economy. Small businesses employed almost 50 percent of the workforce according to 2015 data from the Small Business Administration, and the net jobs being created have only increased since then.

While not having the cash or other resources of large businesses to provide employee benefits, small businesses have just as large of an impact on the economy and the well-being of their employees. With half the workforce being employed by small businesses in today’s world, the workforce wants or needs benefits like health insurance to consider working at such business, and employers are well aware of that, that’s why they are offering it. Health insurance is one of the most convincing ways to hire prospects and to galvanize current employees. Here are some options small businesses have for health insurance.

  1. Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)

Created in just December 2016, QSEHRA is becoming increasingly popular among small employers as it gives businesses with fewer than 50 employees a monthly pay of tax-free money that they can choose to use to pay for health care or other personal insurance policies. Through QSEHRA other health insurance premiums like dental and vision can be reimbursed and in 2018 businesses offered up to $5,000 per year to individuals and $10,250 for families. Small business owners often find QSEHRA as the best choice because there is complete personalization as employees can pick what is best for them and the business is allowed to decide their own budget. QSEHRA also allows a lot of flexibility to small businesses in unique situations.

2. Small Business Health Options Program (SHOP)

SHOP is a part of the Affordable Care Act and the marketplaces are state and/or federally ran. Depending on the state you live in, SHOP marketplaces are running differently and have different eligibility requirements. SHOP is a good coverage option for employers with 50 or fewer employees and they will appreciate being able to select their own insurance plan. Your business could even get a substantial tax credit.

3. Multiple Employer Welfare Arrangement (MEWA) & Association Health Plan (AHP)

AHP is a type of MEWA but both allow small employers join together to create a larger pool of employees. There could be as little as two employers to as many needed for a large enough pool in a group. As long as it benefits the employees it’s a plan exempt from state insurance regulations and legal. In many cases MEWAs are cheaper can offer lower rates than insurance companies. The biggest drawback is the lack of stability as that risk always arises when there’s different companies involved.

4. Integrated Health Reimbursement Arrangement (HRA)

Only offered to companies that take part in group health insurance plans, Integrate HRA’s help employees supplement their deductible costs. Small businesses set a monthly amount of tax-free money for employees to use for medical expenses and this allows businesses to offer additional moneys to employees while paying a lower group premium. Much like QSEHRA, there’s that allowance of personalization which is attractive to small businesses. Unlike QSEHRAs, employees are still insured through group policies that probably don’t benefit their individual needs.

Health Insurance is important to potential prospects searching for a job and Herus Group wants you to succeed in attracting those candidates and retaining them long-term. Call us today to learn more about what we can do for the future of your business.

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