Small Business Health Insurance Strategy

There are a lot of benefits to owning and operating a business in Colorado. One of the most obvious advantages is access to a healthy, passionate workforce that can power your dream. But being located in the Centennial State is not enough to reduce turnover and attract top talent, you need a small business health insurance strategy.

Offering your employees affordable, flexible healthcare options is a quick way to make yourself more attractive as an employer. This is especially true in this day and age when fewer Americans are covered than ever before.

In Colorado, small business health insurance plans are plentiful, especially for companies with fewer than 50 employees. HRAs are popular because they allow the employer to choose a plan and receive a predetermined reimbursement. There are even options available for employers who are unable to offer any benefit at all.

The Benefits of Small Business Health Insurance in Colorado

Employer-sponsored group health insurance plans are one of the most common coverage structures, and for good reason. These plans allow businesses to select a provider, offer one or more plans, then pay a portion of the premiums. Companies can choose how much of the premium will be paid, offering a flexible option for growing businesses.

Some tax credits are also available to small employers. In fact, if you have fewer than 25 employees and your annual average wage is less than $50,000, this credit can be 50% of the paid premiums. No matter what industry you’re in, that number will add up quickly.

Some of the most popular group health insurance plans in Colorado include:

  •       Anthem Blue Cross Blue Shield
  •       Cigna
  •       Bright Health

A good broker will work with you to assemble a viable group program for your business. Then, they will work with your enrolled employees to explain the options and costs of each available plan.

Group plans are fast, simple, and can be a good way to attract and retain top talent. But it isn’t the only option that’s on the table …

Health Reimbursement Arrangements (HRAs)

As opposed to group insurance plans, Health Reimbursement Arrangements provide employees with a pre-set, tax-free reimbursement. Many employees prefer an HRA to a group plan because it allows them to choose any plan on the marketplace. Meanwhile, employers appreciate HRAs because they make it much easier to anticipate healthcare costs from year to year.

On the other hand, a health reimbursement arrangement will make your company ineligible for the Small Business Tax Credit that we mentioned above. In addition, an HRA can impact an employee’s eligibility for the premium ACA tax credit. For this reason, HRAs can inadvertently make things much more expensive for the employee.

However, it is possible to offer some of your employees an HRA and other employees a traditional group plan. For example, you could offer your full-time employees a group plan and your part-timers an HRA. The key is anticipating the needs of your employees and working with your broker to make it happen.

Consider Health Sharing as an Alternative to Group Insurance

While originally targeted to the individual consumer, Health Care Sharing Plans are gaining momentum as an alternative to group insurance. Health care sharing found its popularity as a legal way to buck the ACA tax penalty. Today, however, more people than ever are joining simply to cut their monthly health care costs (sometimes by as much as 50%).

Companies with fewer than 50 full-time employees are able to offer health sharing options. Larger companies, on the other hand, are required by law to offer minimum essential coverage under the Affordable Care Act. For this reason, health sharing is really only a good option for small operations and family businesses.

Health care sharing is not for everyone. These plans do not offer the same level of coverage as traditional insurance. In addition, they may lack preventative care benefits, and there are usually restrictions on pre-existing conditions. It is also important to note that employer-offered health sharing programs are not covered by state-guaranteed funds. So if the health share company suddenly goes out of business, there is no guarantee that benefits will be paid out.

Q: Do I Even Need to Offer Health Benefits?

Businesses in Colorado are more efficient, innovative, and compact than ever before. These companies might only have a few employees, making it impossible to offer traditional benefits. Fortunately, small business employees who are making less than 400% of the poverty level have another option.  At this income level, the federal ACA subsidy comes into play, making marketplace coverage much more affordable.

Interested in learning more about Small Business Insurance in Colorado? Your Personal Benefits Manager can familiarize you with the major players and point you in the right direction. For all other questions, your broker should have all the information you need.