As a business owner, providing adequate healthcare to your employees isn’t just a nice thing to do — it may be a requirement if you have over 50 full-time employees. But what happens when healthcare costs threaten to cripple your business? When traditional group health insurance premiums put an outsized strain on your budget, it can be tempting to look for an option that is more cost-effective. However, many of the alternative options out there tend to hide enormous risks and limitations for both you and your employees.
Let’s discuss the three most popular alternatives to traditional healthcare plans and their inherent drawbacks, so that you can make the best decision for your company and the people who work for you. Of course, when it comes to avoiding common health insurance pitfalls, consulting a broker like Ark Insurance Solutions is always the best way to safeguard yourself against potentially disastrous decisions.
Health Share Plans
Health share plans and healthcare sharing ministries often present themselves as cheaper alternatives to traditional insurance, promising lower monthly payments and free co-pays. However, these plans operate in a regulatory gray area that can leave your employees vulnerable and without coverage. Unlike regulated insurance plans, sharing ministries have no legal obligation to pay on claims. In fact, they operate purely on a voluntary basis. This means that if a health share plan decides not to cover a claim, your employees have no legal recourse.
The limitations don’t stop there. Most sharing ministries impose permanent exclusions or lengthy waiting periods for pre-existing conditions, often denying coverage to employees who need it the most. These plans also frequently refuse to cover preventive care, mental health services, or treatments based on religiously structured morality clauses. Many of them implement strict annual or lifetime caps on coverage, which can leave your employees exposed to catastrophic costs.
“Health care plans look great on paper, but they can be very dangerous because you don’t know what you’re buying and there aren’t always contracts.”
~ Rebecca Yates, CEO of Ark Insurance Solutions
Minimum Essential Coverage (MEC) Plans
MEC plans might barely squeak by the Affordable Care Act’s most basic requirements, but they offer little real protection for your employees. They usually only cover preventive services, leaving employees more or less uninsured for hospitalization, emergency care, prescription drugs, or specialist visits. When employees need actual care that extends beyond basic preventive services, they’re forced to pay full price out of pocket.
These plans don’t just leave your employees in the lurch with barely any coverage, they also provide a sense of false security. Employees often don’t find out how bare-bones their coverage really is until they face a significant medical event. By then, it’s too late. MEC plans can be incredibly enticing for business owners because they comply with certain ACA requirements, but your employees might be better off purchasing their own insurance through the marketplace.
“If an employer is offering coverage and it’s considered affordable, that employee would lose the ability to go to the ACA marketplace and get a policy that’s subsidized,” says Rebecca Yates, CEO of Ark Insurance Solutions. “You can unintentionally make it worse for your employees with these plans.”
If you’re considering a MEC plan, a consultation with Ark Insurance Solutions can provide you with an analysis based on all of your employees, their income, as well as IRS and ACA requirements, giving you the best recommendation for protecting your business and your workforce.
“These plans were designed to meet the absolute minimum that the government asked for… but they often will leave some very large exposures — and they don’t tell people that.”
~ Rebecca Yates, CEO of Ark Insurance Solutions
Fixed Indemnity Insurance
Fixed indemnity insurance seems straightforward, but it’s not. This type of coverage promises to pay a set amount for specific services, regardless of the actual cost. However, this simplistic approach masks some serious shortcomings.
This type of plan can be beneficial as a supplement to an already existing full health insurance plan, but it shouldn’t be used as a standalone option. When medical costs exceed the fixed benefit, employees must pay the difference out of pocket.
These differences can be astronomical, particularly for serious conditions or extended hospitalizations. And what they don’t tell you about fixed indemnity insurance is pretty glaring — your plan won’t negotiate for lower costs, which can ultimately leave you with bankruptcy-inducing medical bills.
For example, let’s consider a scenario where an indemnity plan pays $1,000 per day for hospitalization. In most cases, actual hospital charges can exceed $5,000 per day or more, leaving your employee responsible for a difference of $4,000 per day. And that’s a conservative estimate. A night in the hospital can easily rack up over $100,000 worth in costs, and your employees will end up paying full price for their care. Fixed indemnity plans also often come with a limit of $1 million, which you can easily churn through in just one week of hospital care.
Indemnity insurance can lead to some pretty disastrous outcomes, and they put your employees at risk — even if they never step foot in a hospital. The average costs of common prescription drugs can reach upwards of tens of thousands of dollars a month. Take for instance Skyrizi, a popular medication for psoriasis, arthritis, Crohn’s disease and colitis. It costs around $20,000 per month. A fixed indemnity plan wouldn’t even begin to cover the prescription, and it wouldn’t negotiate the price down, either.
“The downside to fixed indemnity plans is you don’t get any network discounts. The doctor may or may not take that payment in full and there’s a limit.”
~ Rebecca Yates, CEO of Ark Insurance Solutions
The Real Cost to Your Business
While these alternative plans may reduce your immediate business expenses, they often lead to hidden costs that can far outweigh the savings. Employees with inadequate coverage will often delay necessary medical care, leading to increased absenteeism and decreased productivity. The financial stress of medical bills can affect workplace performance and morale, while the discovery of coverage limitations during a medical crisis can severely damage trust between you and your employees.
Most of all, these plans can hamper your ability to attract and retain top talent. In today’s competitive job market, quality health benefits can be a deciding factor for prospective employees. Companies that offer substandard coverage often find themselves at a disadvantage when it comes to recruiting long-term staff.
“Insurance is just math. If it’s cheap, there’s a reason, and you need to know what that reason is,” says Yates. “It’s really important to know what you’re buying, especially if it seems too good to be true.”
A More Sustainable Approach
Instead of risking your employees’ health and financial security with inadequate coverage, consider exploring more sustainable alternatives. By finding a reputable broker, you can protect your business and your employees. “Not all brokers are created equal,” says Yates. “Avoid call centers like the plague. I would recommend someone who has been in the industry a long time and has a local presence in your community.”
Here at Ark Insurance Solutions, we’re committed to providing the best access to care at a cost that makes sense for your business. If you’re considering an alternative like those listed above, know that there are better plans out there, and we’ll work to consider all of your options with a dedicated team of experts that are passionate about what we do.
At the end of the day, the true measure of an employee health benefit plan isn’t its monthly premium, but its ability to protect your employees’ health and financial security while supporting your business goals. While health share plans, MEC plans, and fixed indemnity insurance might offer short-term savings, they often fail to deliver real value to anyone — not your business, and certainly not for your employees.
Remember that healthy, financially secure employees are more productive, more loyal, and more likely to contribute to your company’s long-term success. By investing in meaningful health coverage now, you’re not just providing an employee benefit – you’re making a strategic investment in your company’s future.
Navigating the complex world of health insurance can be daunting. The Ark Insurance Solutions team has the skill and experience to guide you. We’ll help you compare health plans to make the best decision based on your unique circumstances and budget. Give us a call at 801-901-7800 or click here to schedule an appointment with us.
https://www.ark-ins.com/wp-content/uploads/2024/12/2.png10801920The Ark Insurance Team/wp-content/uploads/2019/10/ark-logo@2x.pngThe Ark Insurance Team2024-12-29 02:31:052025-01-11 18:50:19Up a Creek Without a Paddle: Health Plans That May Fail Business Owners and Employees
“ICHRAs are designed to give employers flexibility when offering a group health plan.”
~ Rebecca Yates, CEO of Ark Insurance Solutions
Individual Coverage Health Reimbursement Arrangements, most commonly known as ICHRA plans, have become increasingly popular in some areas as a flexible alternative to group plans. And since they represent a significant shift in how businesses approach health insurance, they’re worth knowing about.
ICHRA plans are relatively new. First introduced in 2020, they’ve gained some traction among businesses looking for an affordable group health insurance option. But, like anything else, ICHRA plans also come with potential drawbacks. Depending on what state you’re in, how many employees you have, and the overall health of your group, an ICHRA plan might not be the best option for you.
If you’re a business owner looking at alternative health plans like ICHRA, we recommend getting an in-depth analysis with a trusted professional. While they can be particularly advantageous in states like Alaska, they aren’t so much in Utah — the nuance of which we’ll discuss below.
What exactly is an ICHRA plan?
In a nutshell, ICHRA plans allow employers to reimburse their employees for individual health insurance premiums and qualified medical expenses, and the reimbursement is completely tax-free. Rather than selecting and managing a one-size-fits-all group health plan, businesses can provide employees with a predetermined amount of money each month. Employees then use that money to purchase an individual health insurance coverage on the marketplace that best fits their specific needs.
Think of an ICHRA as essentially creating a personal expense account for each employee’s healthcare needs. When employees incur medical expenses or pay their individual insurance premiums, they can submit receipts for reimbursement up to their allowed amount. This arrangement offers a fair amount of flexibility, while still providing the same tax advantages that are typically associated with employer-sponsored health benefits.
Where ICHRAs shine
For some companies, ICHRAs present an attractive option, because they solve some of the most common challenges among business owners in providing adequate health benefits. This kind of control is valuable for growing businesses or those operating across multiple states.
ICHRAs also get rid of the administrative burden of managing a group health plan. No more annual renewal negotiations, plan design decisions, or employee enrollment periods. Instead, companies just have to decide what the employee reimbursement amounts will be and process employee receipts — this is something they should delegate to third-party administrators.
This arrangement can work pretty well for companies that have a diverse workforce spread across several states. Rather than trying to find a single group plan that satisfies everyone, employees can select the coverage that matches their needs. A young, healthy employee might choose a high-deductible plan with lower premiums, while an employee managing a chronic condition might opt for more comprehensive coverage.
“It’s not uncommon for an employer to come to us and say, ‘I have people in 20 states. How do I possibly build a group health plan for them?’ And often ICHRAs are the answer.”
Despite their advantages, ICHRAs aren’t without potential drawbacks. And much of this depends on what state your business and employees are operating in. The success of an ICHRA program directly correlates with the strength of the individual insurance market in your area. So, if you take Utah for instance, the state has a much more affordable group market with excellent benefits, which ICHRA can’t compete with. It’s likely that employees would struggle to find better coverage with their ICHRA allowance. But in Alaska, ICHRA plans often present a more beneficial choice.
Whether or not ICHRA is a good idea can also come down to the number of employees your business is supporting. If a large employer with more than 50 employees can’t get enough people to enroll in a group plan, or if that plan is somehow canceled by the carrier, they could potentially use an ICHRA as an affordable option.
“ICHRAs tend to be better for those large employer scenarios where they’re trying to be compliant because now they’re going to get penalized if they’re not offering, but they can’t find a good way to offer,” says Rebecca Yates, CEO of Ark Insurance Solutions. “They can be a good alternative for businesses that have a hard time meeting participation.”
Employee education represents another challenge to the overall effectiveness of an ICHRA plan. Many workers are familiar with traditional group health insurance but they might find the individual market confusing. They’ll need guidance on selecting appropriate coverage, understanding how reimbursements work, and managing their healthcare spending.
Some employees might also miss the simplicity of having their employer choose their health plan. While flexibility can be helpful, it also means employees must take more active roles in their healthcare decisions. This responsibility can feel overwhelming, especially for employees who have never had to shop for health insurance before.
Tax advantages
ICHRA does have its tax advantages, with reimbursements that are tax-deductible for employers and tax-free for employees. This is a significant benefit compared to simply providing extra salary for healthcare expenses. It allows businesses to provide health benefits with the same tax advantages as traditional group coverage but with greater flexibility and often lower administrative costs.
ICHRAs can also help businesses better control their long-term healthcare costs. Unlike traditional group plans, where premium increases are the norm, employers can adjust ICHRA allowances based on their budget and business performance.
“We can have you give a dollar amount to each employee, have it come out with a pre -tax benefit, and then those employees can use that money to buy a plan that works for them in their area.”
Choosing ICHRA
When it comes to implementing an ICHRA plan, you need to carefully plan and provide clear communication and assistance for your employees. This isn’t a decision to enter into lightly, and you shouldn’t do it without a broker. If your business has less than 50 employees and they aren’t making high salaries, it may be smarter to allow them to qualify for federal subsidies through the ACA marketplace instead. Because there are so many caveats to an ICHRA plan, it’s best to get help from a knowledgeable professional.
When choosing an ICHRA plan, businesses need to determine appropriate reimbursement amounts for different employee classes, making sure these amounts give employees the ability to purchase adequate coverage. They also need to establish clear policies surrounding eligible expenses and reimbursement procedures.
“Most brokers are only comfortable with group or individual plans. But at Ark, we’re well-versed in both of these options and can help you find what best fits your business,” says Yates. “It’s important to get an analysis from someone who knows what they’re doing and is established in your area.”
Making the decision
Whether an ICHRA makes sense for your business or not depends on a variety of factors, like your workforce demographics, local insurance market conditions, and administrative capabilities. A thorough analysis from Ark will look at your current health benefit costs and challenges, and compare those against projected ICHRA expenses. We consider everything, including the reimbursement amounts and administrative costs of the plan. It’s also important to think about your employees and their preferences. You may want to take into account the overall health of your group and their potential needs when it comes to healthcare. At Ark, we take every factor into consideration.
As healthcare costs continue to rise and workforce needs evolve, ICHRAs represent a new approach to employee health benefits that may be helpful in certain states and/or situations. While they may not be the perfect solution for every business, they present a compelling alternative worth considering.
For businesses struggling with traditional group health insurance or seeking more predictable benefit costs, ICHRAs can be worth looking into. However, they still require careful planning. In the right use cases, ICHRAs can create a win-win situation – providing employees with the health benefits they need while giving employers greater control over their healthcare spending.
Want to see which plans might best fit your needs? Click here to schedule an appointment with an Ark Insurance Solutions agent. Navigating the complex world of health insurance can be daunting. The Ark Insurance Solutions team has the skill and experience to guide you. We’ll help you compare health plans to make the best decision based on your unique circumstances and budget. Give us a call at 801-901-7800 or click here to schedule an appointment with us.
https://www.ark-ins.com/wp-content/uploads/2024/11/1.png10801920The Ark Insurance Team/wp-content/uploads/2019/10/ark-logo@2x.pngThe Ark Insurance Team2024-11-25 00:33:382024-12-01 02:18:03What’s The Buzz? Have You Heard About ICHRA Plans?
If you’re a small business owner and you’ve been waiting to offer a group health plan, now might be the perfect time. Until December 15th, the U.S. government has waived the Minimum Participation Rate (MPR) requirement as well as the minimum contribution requirement. This temporary waiver aims to make it easier and more affordable for employers with 2 to 50 employees to get health insurance coverage for their team.
In Utah, the Minimum Participation Rate (MPR) is generally 75%, which means that without this waiver, 75% of your eligible employees would have to enroll in a health insurance plan you are providing for you to offer insurance. But here’s how the waiver helps. Even if you have 50 employees, with the waiver, you would only need two employees who wanted to sign up for health insurance to make it work.
During the rest of the year, employers are required to pay for a certain portion of their employees’ health insurance. During the waiver period, employees can configure the arrangement so that each employee pays 100% of the cost for their own health insurance. So, even if in the past providing health insurance to your employees seemed out of reach, during this special window it might just be possible.
If your company wants to take advantage of this special waiver, it’s important to understand that it takes a few weeks for a health insurance agent or broker to help you explore plans, choose a plan, enroll in the plan, and get all the paperwork signed and accepted by the carrier. Since all paperwork must be signed and accepted by December 15, 2024 (with coverage beginning January 1, 2025), you should book an appointment with an agent now.
Want to see which plans might best fit your needs? Click here to schedule an appointment with an Ark Insurance Solutions agent.
https://www.ark-ins.com/wp-content/uploads/2024/11/ShopWaiver1rev.jpg10801920The Ark Insurance Team/wp-content/uploads/2019/10/ark-logo@2x.pngThe Ark Insurance Team2024-11-22 02:35:522024-11-24 20:39:10Small Business Owners: With a Limited-Time Waiver, You Can Offer a Group Health Insurance Plan for Your Team at No Cost to You
Up a Creek Without a Paddle: Health Plans That May Fail Business Owners and Employees
/by The Ark Insurance TeamAs a business owner, providing adequate healthcare to your employees isn’t just a nice thing to do — it may be a requirement if you have over 50 full-time employees. But what happens when healthcare costs threaten to cripple your business? When traditional group health insurance premiums put an outsized strain on your budget, it can be tempting to look for an option that is more cost-effective. However, many of the alternative options out there tend to hide enormous risks and limitations for both you and your employees.
Let’s discuss the three most popular alternatives to traditional healthcare plans and their inherent drawbacks, so that you can make the best decision for your company and the people who work for you. Of course, when it comes to avoiding common health insurance pitfalls, consulting a broker like Ark Insurance Solutions is always the best way to safeguard yourself against potentially disastrous decisions.
Health Share Plans
The limitations don’t stop there. Most sharing ministries impose permanent exclusions or lengthy waiting periods for pre-existing conditions, often denying coverage to employees who need it the most. These plans also frequently refuse to cover preventive care, mental health services, or treatments based on religiously structured morality clauses. Many of them implement strict annual or lifetime caps on coverage, which can leave your employees exposed to catastrophic costs.
Minimum Essential Coverage (MEC) Plans
These plans don’t just leave your employees in the lurch with barely any coverage, they also provide a sense of false security. Employees often don’t find out how bare-bones their coverage really is until they face a significant medical event. By then, it’s too late. MEC plans can be incredibly enticing for business owners because they comply with certain ACA requirements, but your employees might be better off purchasing their own insurance through the marketplace.
“If an employer is offering coverage and it’s considered affordable, that employee would lose the ability to go to the ACA marketplace and get a policy that’s subsidized,” says Rebecca Yates, CEO of Ark Insurance Solutions. “You can unintentionally make it worse for your employees with these plans.”
If you’re considering a MEC plan, a consultation with Ark Insurance Solutions can provide you with an analysis based on all of your employees, their income, as well as IRS and ACA requirements, giving you the best recommendation for protecting your business and your workforce.
Fixed Indemnity Insurance
This type of plan can be beneficial as a supplement to an already existing full health insurance plan, but it shouldn’t be used as a standalone option. When medical costs exceed the fixed benefit, employees must pay the difference out of pocket.
These differences can be astronomical, particularly for serious conditions or extended hospitalizations. And what they don’t tell you about fixed indemnity insurance is pretty glaring — your plan won’t negotiate for lower costs, which can ultimately leave you with bankruptcy-inducing medical bills.
For example, let’s consider a scenario where an indemnity plan pays $1,000 per day for hospitalization. In most cases, actual hospital charges can exceed $5,000 per day or more, leaving your employee responsible for a difference of $4,000 per day. And that’s a conservative estimate. A night in the hospital can easily rack up over $100,000 worth in costs, and your employees will end up paying full price for their care. Fixed indemnity plans also often come with a limit of $1 million, which you can easily churn through in just one week of hospital care.
Indemnity insurance can lead to some pretty disastrous outcomes, and they put your employees at risk — even if they never step foot in a hospital. The average costs of common prescription drugs can reach upwards of tens of thousands of dollars a month. Take for instance Skyrizi, a popular medication for psoriasis, arthritis, Crohn’s disease and colitis. It costs around $20,000 per month. A fixed indemnity plan wouldn’t even begin to cover the prescription, and it wouldn’t negotiate the price down, either.
The Real Cost to Your Business
While these alternative plans may reduce your immediate business expenses, they often lead to hidden costs that can far outweigh the savings. Employees with inadequate coverage will often delay necessary medical care, leading to increased absenteeism and decreased productivity. The financial stress of medical bills can affect workplace performance and morale, while the discovery of coverage limitations during a medical crisis can severely damage trust between you and your employees.
Most of all, these plans can hamper your ability to attract and retain top talent. In today’s competitive job market, quality health benefits can be a deciding factor for prospective employees. Companies that offer substandard coverage often find themselves at a disadvantage when it comes to recruiting long-term staff.
“Insurance is just math. If it’s cheap, there’s a reason, and you need to know what that reason is,” says Yates. “It’s really important to know what you’re buying, especially if it seems too good to be true.”
A More Sustainable Approach
Instead of risking your employees’ health and financial security with inadequate coverage, consider exploring more sustainable alternatives. By finding a reputable broker, you can protect your business and your employees. “Not all brokers are created equal,” says Yates. “Avoid call centers like the plague. I would recommend someone who has been in the industry a long time and has a local presence in your community.”
Here at Ark Insurance Solutions, we’re committed to providing the best access to care at a cost that makes sense for your business. If you’re considering an alternative like those listed above, know that there are better plans out there, and we’ll work to consider all of your options with a dedicated team of experts that are passionate about what we do.
At the end of the day, the true measure of an employee health benefit plan isn’t its monthly premium, but its ability to protect your employees’ health and financial security while supporting your business goals. While health share plans, MEC plans, and fixed indemnity insurance might offer short-term savings, they often fail to deliver real value to anyone — not your business, and certainly not for your employees.
Remember that healthy, financially secure employees are more productive, more loyal, and more likely to contribute to your company’s long-term success. By investing in meaningful health coverage now, you’re not just providing an employee benefit – you’re making a strategic investment in your company’s future.
What’s The Buzz? Have You Heard About ICHRA Plans?
/by The Ark Insurance TeamIndividual Coverage Health Reimbursement Arrangements, most commonly known as ICHRA plans, have become increasingly popular in some areas as a flexible alternative to group plans. And since they represent a significant shift in how businesses approach health insurance, they’re worth knowing about.
ICHRA plans are relatively new. First introduced in 2020, they’ve gained some traction among businesses looking for an affordable group health insurance option. But, like anything else, ICHRA plans also come with potential drawbacks. Depending on what state you’re in, how many employees you have, and the overall health of your group, an ICHRA plan might not be the best option for you.
If you’re a business owner looking at alternative health plans like ICHRA, we recommend getting an in-depth analysis with a trusted professional. While they can be particularly advantageous in states like Alaska, they aren’t so much in Utah — the nuance of which we’ll discuss below.
What exactly is an ICHRA plan?
In a nutshell, ICHRA plans allow employers to reimburse their employees for individual health insurance premiums and qualified medical expenses, and the reimbursement is completely tax-free. Rather than selecting and managing a one-size-fits-all group health plan, businesses can provide employees with a predetermined amount of money each month. Employees then use that money to purchase an individual health insurance coverage on the marketplace that best fits their specific needs.
Think of an ICHRA as essentially creating a personal expense account for each employee’s healthcare needs. When employees incur medical expenses or pay their individual insurance premiums, they can submit receipts for reimbursement up to their allowed amount. This arrangement offers a fair amount of flexibility, while still providing the same tax advantages that are typically associated with employer-sponsored health benefits.
Where ICHRAs shine
For some companies, ICHRAs present an attractive option, because they solve some of the most common challenges among business owners in providing adequate health benefits. This kind of control is valuable for growing businesses or those operating across multiple states.
ICHRAs also get rid of the administrative burden of managing a group health plan. No more annual renewal negotiations, plan design decisions, or employee enrollment periods. Instead, companies just have to decide what the employee reimbursement amounts will be and process employee receipts — this is something they should delegate to third-party administrators.
This arrangement can work pretty well for companies that have a diverse workforce spread across several states. Rather than trying to find a single group plan that satisfies everyone, employees can select the coverage that matches their needs. A young, healthy employee might choose a high-deductible plan with lower premiums, while an employee managing a chronic condition might opt for more comprehensive coverage.
Despite their advantages, ICHRAs aren’t without potential drawbacks. And much of this depends on what state your business and employees are operating in. The success of an ICHRA program directly correlates with the strength of the individual insurance market in your area. So, if you take Utah for instance, the state has a much more affordable group market with excellent benefits, which ICHRA can’t compete with. It’s likely that employees would struggle to find better coverage with their ICHRA allowance. But in Alaska, ICHRA plans often present a more beneficial choice.
“ICHRAs tend to be better for those large employer scenarios where they’re trying to be compliant because now they’re going to get penalized if they’re not offering, but they can’t find a good way to offer,” says Rebecca Yates, CEO of Ark Insurance Solutions. “They can be a good alternative for businesses that have a hard time meeting participation.”
Employee education represents another challenge to the overall effectiveness of an ICHRA plan. Many workers are familiar with traditional group health insurance but they might find the individual market confusing. They’ll need guidance on selecting appropriate coverage, understanding how reimbursements work, and managing their healthcare spending.
Some employees might also miss the simplicity of having their employer choose their health plan. While flexibility can be helpful, it also means employees must take more active roles in their healthcare decisions. This responsibility can feel overwhelming, especially for employees who have never had to shop for health insurance before.
Tax advantages
ICHRA does have its tax advantages, with reimbursements that are tax-deductible for employers and tax-free for employees. This is a significant benefit compared to simply providing extra salary for healthcare expenses. It allows businesses to provide health benefits with the same tax advantages as traditional group coverage but with greater flexibility and often lower administrative costs.
Choosing ICHRA
When it comes to implementing an ICHRA plan, you need to carefully plan and provide clear communication and assistance for your employees. This isn’t a decision to enter into lightly, and you shouldn’t do it without a broker. If your business has less than 50 employees and they aren’t making high salaries, it may be smarter to allow them to qualify for federal subsidies through the ACA marketplace instead. Because there are so many caveats to an ICHRA plan, it’s best to get help from a knowledgeable professional.
When choosing an ICHRA plan, businesses need to determine appropriate reimbursement amounts for different employee classes, making sure these amounts give employees the ability to purchase adequate coverage. They also need to establish clear policies surrounding eligible expenses and reimbursement procedures.
“Most brokers are only comfortable with group or individual plans. But at Ark, we’re well-versed in both of these options and can help you find what best fits your business,” says Yates. “It’s important to get an analysis from someone who knows what they’re doing and is established in your area.”
Whether an ICHRA makes sense for your business or not depends on a variety of factors, like your workforce demographics, local insurance market conditions, and administrative capabilities. A thorough analysis from Ark will look at your current health benefit costs and challenges, and compare those against projected ICHRA expenses. We consider everything, including the reimbursement amounts and administrative costs of the plan. It’s also important to think about your employees and their preferences. You may want to take into account the overall health of your group and their potential needs when it comes to healthcare. At Ark, we take every factor into consideration.
As healthcare costs continue to rise and workforce needs evolve, ICHRAs represent a new approach to employee health benefits that may be helpful in certain states and/or situations. While they may not be the perfect solution for every business, they present a compelling alternative worth considering.
For businesses struggling with traditional group health insurance or seeking more predictable benefit costs, ICHRAs can be worth looking into. However, they still require careful planning. In the right use cases, ICHRAs can create a win-win situation – providing employees with the health benefits they need while giving employers greater control over their healthcare spending.
Want to see which plans might best fit your needs? Click here to schedule an appointment with an Ark Insurance Solutions agent.
Navigating the complex world of health insurance can be daunting. The Ark Insurance Solutions team has the skill and experience to guide you. We’ll help you compare health plans to make the best decision based on your unique circumstances and budget. Give us a call at 801-901-7800 or click here to schedule an appointment with us.
Small Business Owners: With a Limited-Time Waiver, You Can Offer a Group Health Insurance Plan for Your Team at No Cost to You
/by The Ark Insurance TeamIf you’re a small business owner and you’ve been waiting to offer a group health plan, now might be the perfect time. Until December 15th, the U.S. government has waived the Minimum Participation Rate (MPR) requirement as well as the minimum contribution requirement. This temporary waiver aims to make it easier and more affordable for employers with 2 to 50 employees to get health insurance coverage for their team.
In Utah, the Minimum Participation Rate (MPR) is generally 75%, which means that without this waiver, 75% of your eligible employees would have to enroll in a health insurance plan you are providing for you to offer insurance. But here’s how the waiver helps. Even if you have 50 employees, with the waiver, you would only need two employees who wanted to sign up for health insurance to make it work.
During the rest of the year, employers are required to pay for a certain portion of their employees’ health insurance. During the waiver period, employees can configure the arrangement so that each employee pays 100% of the cost for their own health insurance. So, even if in the past providing health insurance to your employees seemed out of reach, during this special window it might just be possible.
If your company wants to take advantage of this special waiver, it’s important to understand that it takes a few weeks for a health insurance agent or broker to help you explore plans, choose a plan, enroll in the plan, and get all the paperwork signed and accepted by the carrier. Since all paperwork must be signed and accepted by December 15, 2024 (with coverage beginning January 1, 2025), you should book an appointment with an agent now.
Want to see which plans might best fit your needs? Click here to schedule an appointment with an Ark Insurance Solutions agent.