Health Care Contributions- What Are Your Options?
Some of your options as an Employer and Employee:
Review other Insurance Carriers:
Once you have received your new health insurance quote, review it with your broker. Make sure you have received quotes from other health insurance providers as well as the current plan. Providers know you will be considering other plans and want to stay as competitive as possible. Maybe last year you wanted to stay with the same plan but it was too expensive but this year they are have more plan options in line with other carriers.
Employer contribution; fixed amount or percentage towards employee’s premium? Many employers are no longer contributing a certain percentage towards the premium but a fixed amount, this helps for budgeting purposes and for employees to know exactly what they will be receiving each year. It allows the employee to review their options, perhaps it’s more feasible for them to go on their spouse/ partner’s plan.
Health Reimbursement Accommodation (HRA):
The employer can opt for a larger deductible plan which saves on premium costs and reimburses the employee for a predetermined piece of the deductible or out of pocket expense they face. The IRS considers this a formal plan requiring a plan document and follow outlined protocol. Generally, the expense of this is more than funded by the savings.
Read More: https://www.zanebenefits.com/blog/bid/97288/health-reimbursement-arrangement-hra-what-is-it
Health Savings Account. (HSA):
Under this plan the employer does not reimburse employees for the larger deductible plan but gives the employees savings on their state and federal income tax. HSA contributions are pre-tax/tax deductible. The employee decides on the amounts to contribute to their account each year which then gets deducted from their payroll and can use the funds on eligible medical expenses. This includes deductibles, co-pays and coinsurance, plus other qualified medical expenses not covered by your plan.
More Than 50 Employees:
There are different rules that apply to employers with 50 or more employees.
Read More: https://www.irs.gov/affordable-care-act/employers
There are many things to think about in this ever-changing health care system and the best place to start is with your broker to review all of your options.
If you need a referral for a great broker, please feel free to contact me.