As it stands now, companies with 50 or more full-time employees must offer health insurance coverage to full-time workers. However, this requirement does not apply to small businesses with less than 50 full-time employees.
When it comes to health coverage, employees want choices.
While today's employees place a lot of value on health insurance benefits offered by an employer, they also want choice. According to a recent Health and Voluntary Benefits Survey, 80 percent of respondents said that having a say in their health benefits coverage is either "very important" or "extremely important." It’s a fine balance for an employer to offer health plans that are both stable in cost and that give employees the flexibility to choose what will work best for their individual needs and budget.
An HRA gives employees more flexibility when choosing health coverage.
A small business Health Reimbursement Arrangement (HRA) is a solution that allows employees to choose a health insurance policy through the individual market that best serves their needs while still offering them valuable reimbursements for out of pocket expenses. Depending on where the employee lives, he or she will generally have many more options for health coverage as an individual than under any group insurance offered by an employer, but small employers would need to consider if or how such a program might impact an employee’s potential qualification for a premium tax-credit and/or cost sharing from the FFM.
There is really not one right answer when it comes to a small business deciding whether to offer a group health policy or a Health Reimbursement Arrangement. The decision should be made based on the unique circumstances of your workforce. What's consistently important however, is evaluating all options and delivering personalized benefits solutions to your employees. This will always lead to higher employee retention rates and more satisfied workers.
We understand that many employers have questions surrounding how an HRA works, and we are happy to address these questions so that you can make an informed decision about health coverage for your employees. Please contact us to learn more about how you can give your employees more choices for health coverage while also staying within your budget.