Arkansas Small Business Health Insurance Options
Welcome to the HSA for America Complete Guide to Arkansas Small Business Health Insurance. This guide is targeted at Arkansas small businesses with less than 30 employees.
This document will help Arkansas independent professionals and small-business owners provide their staff with health benefits that are cost effective. To remain competitive you must offer benefits that are attractive to the talent you want and the package of compensation necessary to retain them.
Arkansas Small Business Health Insurance Health Benefits
Arkansas’s small business owners have a variety of options to choose from when providing benefits for their employees.
One of the most cost-effective, yet most commonly used, options is implementing a traditional health insurance plan.
Prices are dependent on the age of the employee and their family. However, according to statistics from the Kaiser Family Foundation in 2021, the cost for employer-sponsored health insurance that covers a worker’s and his/her family was an average $18,339.
Arkansas employees contribute an average of $6,502 to their health insurance, which is a bit more than $300 over the national average.
Arkansas business owners have several other options available to them that will help reduce their cost. These include:
- Health savings Accounts (HSAs)
- HRAs are health reimbursement plans.
- Direct Primary Care (DPC), memberships
- Programs for health sharing
What is the best small business strategy? It depends on several factors including your budget and size, but also your workers’ age and health requirements.
Arkansas Small Businesses and Their Geographic Requirements
Arkansas’ unique healthcare ecosystem is also important to consider. It includes busy cities such as Fayetteville, Little Rock, Jonesboro, and more rural locations around Waldron or Horatio.
Arkansas businesses should carefully consider the distribution of their staff across the state. If the company’s headquarters is located in Jonesboro, it does no good to select an HMO that only allows employees to see doctors within its network when most of their staff and family members live and/or work in Cash.
Arkansas Small Business Group Health Insurance
Arkansas’s employers most commonly choose the traditional health group plan.
And it’s more costly than other options. .
What’s the process?
Employers contract with third party insurance providers – typically a profit-making corporation – to offer a package of benefits in health insurance for employees and, if desired by the employer, their family members.
The Affordable Care Act requires that employers who have 50 employees or more offer ACA qualified health insurance for all their employees working more than 30 hours per week. Otherwise, they will be penalized.
Health insurance plans must include the 10 minimum essential coverages required by the Affordable Care Act. The ten essential coverages (MEC) are as follows:
- Patients can receive ambulatory services without needing to go into hospital.
- Emergency services
- Hospitalization can include overnight hospitalizations and surgery.
- The care of newborns, pregnant women, and mothers (before and after the birth).
- Treatment for substance abuse disorders, mental illness and behavioral problems (including counseling and therapy)
- Prescription drugs
- The Rehabilitation and habilitative Services and Devices (services and equipment to assist people with disabilities or injuries gain mental and physical abilities)
- Laboratory services
- Chronic disease management and prevention services
- Adult dental coverage is not essential for adults.
In addition, the ACA mandates that insurance policies cover contraception and breastfeeding.
The traditional option of health insurance, while expensive for companies, has the advantage that it is guaranteed to enroll.
When a worker enrolls for health insurance, whether it is during his initial enrollment when he first qualifies or during any special enrollment due to a qualifying event in their life, as well as during the general enrollment starting November 1st each year, an insurer cannot refuse coverage or charge higher rates because of his medical history.
Arkansas Small Businesses Can Opt Out of Health Insurance
In accordance with the Affordable Care Act employers employing fewer than 50 people are not obliged to provide any form of health insurance.
Arkansas State Law does not impose any requirement. The state of Arkansas does not require employers with fewer than 50 workers to offer insurance.
But it is a smart idea for businesses to offer health coverage to employees, including small ones. Without it it would be very difficult to keep and attract quality workers.
Arkansas in particular, is known for its low rate of unemployment and the fierce competition to attract talent from employers.
Arkansas employers have the potential to save lots of money through a Medical Cost Sharing or Health Share Plan (more details below). You can pay all or part of your employee’s medical costs.
Read on the go, download our Complete Guide To Small Business Healthcare Plans.
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HRA Alternative for Arkansas Small Business Health Insurance
You could also help employees to purchase their own health insurance, tax-free.
QSEHRAs offer the following advantages to employers:
1.) There are no minimum contributions.
QSEHRAs do not require you to make a certain minimum amount every year like pension plans. Employers can choose their own HRA budget, which they may change each year depending on cash flow.
A QSEHRA allows you to control the budget of your medical benefits.
Employees can be offered a different benefit based on whether they are married or have children. You can therefore discriminate against employees without dependents by offering a higher benefit to those with families.
3.) Both employers and employees are eligible for tax-free treatment.
Contributions by employers are tax-deductible. Your employees won’t pay tax on the QSEHRA benefits, unlike those paid in cash.
A QSEHRA offers a more attractive alternative to a simple health insurance allowance that can be used by employees for other purposes, such as purchasing health insurance.
4.) QSEHRAs are designed to support the employee’s choice
In many cases, traditional health insurance group plans are designed to limit the choices of health insurance for a diverse range of employees.
Most of the time, these products are too expensive or not appropriate for workers. This is because HR departments and managers choose them and do not consult with workers.
QSEHRAs offer workers and their families more options, allowing them to find the plan that best suits them.
Taxation of Employer Health Coverage in Arkansas
As an employer, you can deduct all of the health insurance premiums that you pay. This is true under federal law and Arkansas’s state laws. These premiums are not taxable for the employees.
Costs of the health sharing plan are lower. These plans’ monthly fees are tax-deductible for employees. The employee is taxed if the employer pays for their health share costs.
The Disadvantages to Arkansas Employer Group Medical Insurance
Employers and employees alike have some serious disadvantages to the traditional employer-group health insurance.
- Cost. It’s much higher.
Many workers are overburdened by the requirements and coverages mandated in health insurance policies. Washington, Little Rock and other government agencies have imposed these regulations and mandatory provisions.
As an example, the traditional insurance industry requires insurers to include mental health and drug-and-alcohol addictions benefits in their premiums. They also require them to add maternity and other benefits.
It makes them less efficient and more expensive than they should be.
- Inflexibility. Many group health plans are one-size fit all strategies that do not always meet employee needs or budgets. The nature of employer-sponsored health insurance group plans is to only offer a few solutions, which may not suit the needs and budgets of specific employees.
It may make sense for workers to buy their own plans on the market. They could take advantage of subsidies provided by the Affordable Care Act.
These workers may benefit from a cheaper health sharing plan. Affordable and innovative alternatives to insurance may be the best solution for people in good physical health who do not have pre-existing health conditions.
- Administrative burden. Administrative expenses are significant when it comes to managing full health benefits. This includes managing documentation and ensuring compliance. You can also audit plans to verify that no non-qualified employees have been enrolled in the plan. They are vital to the smooth running of a company’s insurance program.
The plans can be a significant burden for employers with a small head count who cannot justify hiring a staff member to oversee the program.
To avoid this, entrepreneurs can opt for strategies like the Health Reimbursement Arrangements.
Alternative approaches can encourage employees to purchase their own coverage through the Affordable Care act. It may be possible to get subsidies if workers do this. This also removes the employer from the entire process, which reduces overhead and administrative expenses.
Health Sharing Plans in Arkansas
Small businesses in Arkansas can benefit from health sharing plans as an affordable and viable alternative to expensive insurance.
Arkansas businesses are using medical cost-sharing plans to replace traditional group health plans. These plans can be more affordable. Companies can save as much as 50% by switching to health-sharing plans from traditional group insurance.
Arkansas small companies could save over $10,000 for family coverage per employee and over $3500 per employee annually.
These programs represent a revolutionary method of financing healthcare. This allows companies to afford high-quality healthcare for their staff while also controlling expenses. A health sharing program is based on sharing resources across a number of people and organizations.
As an alternative to traditional health insurance that involves payment of premiums, the participants in a Health Sharing Program make a set amount of cash per year.
Health Sharing Plans vs. Arkansas Small Business Health Insurance
The health sharing plan is not the same as health insurance.
Health sharing groups are associations made up of people with similar interests who share medical costs. Health sharing organizations are not-for-profit, unlike health insurance companies.
Health insurance plans do not have such a requirement. Health sharing organizations are not subject to the Ten Minimum Coverage Requirements.
For example, medical cost-sharing plans do not have to pay for addiction treatment in the case of people who don’t use drugs. They don’t have to pay for injuries caused by drunken driving.
Unlike health insurance, some health sharing plans impose waiting times before they share costs for treating pre-existing health conditions.
They may also require waiting periods for surgery, but only for accidents or injuries which could not be anticipated prior to a member enrolling.
This waiting period helps health sharing organizations offer a wonderful set of health benefits at a fraction of what it would cost to purchase a group health plan that is not subsidized under the Affordable Care Act (ACA) or through the Arkansas Health Insurance Marketplace.
Please note that health sharing plans do not qualify for subsidies as part of the Affordable Care act. However, the savings are so significant that switching to a health sharing plan is still beneficial for many, regardless of whether they qualify for an Affordable Care Act subsidy.
Arkansas employers often find that switching to health-sharing makes more sense because small groups are not eligible for a tax credit under the ACA.
Health Sharing and Network Restrictions—Arkansas
Health sharing plans provide more flexibility when selecting healthcare providers. This contrasts with traditional managed-care plans, like PPOs and the HMOs that are most commonly offered by employers.
Arkansas’s health sharing organizations do not typically restrict access to their providers. As a result, the members of a health sharing plan are able to pick their own provider. Give people the right to choose their own doctors.
Are You a Business That Can Benefit From Health Sharing?
Each company has its unique needs. Be it traditional group health plans or health sharing, choosing the most suitable plan requires some analysis.
Good news for Arkansas’ business owners: it is easy to obtain a case study and specific recommendations tailored to your company and team.
You can make an online appointment by simply clicking on this link.
If you’ve prepared a census of your employees, it will make things easier.
In many cases, switching employees to health coverage can result in savings of thousands of dollars. If you are dealing with employees who have pre-existing health conditions, it may be best to avoid health sharing.
Free consultations and analyses are available.
Arkansas Small Business Health Insurance: Health Reimbursement Plans
HRAs are tax-free benefits funded by employers that reimburse employees for their individual health care costs.
Arkansas’s small business owners often drop group health benefits altogether. They instead establish an HRA and provide the money to their employees to purchase individual health insurance on the market with dollars pre-taxed.
The company can also benefit from the available subsidy, lowering the overall cost to the employee and the employer.
After paying for the insurance premiums, if any HRA funds remain, employees can use them to cover other costs, such as prescriptions and durable medical devices, deductibles, or co-pays. HRA benefits remain tax-free for the employee.
Employees can also use their HRA to pay other expenses, including prescriptions, durable medical equipment, and co-pays. HRA benefits, once again, are not taxed to employees.
An HRA is a great alternative to formal group health insurance because it allows your employees to pick the plans they prefer.
Click here to learn more about HRAs for small businesses.
QSEHRAs—The HRA for Small Businesses
QSEHRA or Qualified Small Employee Health Reimbursement Agreement (pronounced “Cue Sarah”) is the special HRA type that small businesses can utilize.
This benefit is intended for businesses with fewer than 50 full-time staff or its equivalent.
Business owners can set the maximum QSEHRA amount they wish to contribute, as long as it is within certain parameters. Arkansas employers are allowed to make contributions up until 2023 of up to $5,850 (up $487.50 each month for an individual employee) and $11,800 (up $983.33 monthly for an employee with a household).
This money is used by employees to purchase insurance on their own via an online health exchange website or via Personal benefits Manager, in the family and individual health insurance markets. It preserves eligibility for subsidies, something they could not receive under a company-paid health plan.
Employers can reimburse their employees either for the premium alone or for the premiums plus additional medical costs.
QSEHRAs & Special Enrollment Periods
Your employees are eligible for Special Enrollment Periods when you replace your existing health plan with HRAs. This 60-day period allows your employees to purchase their own ACA qualified insurance plans with guaranteed issue without having to go through medical underwriting.
It will help ensure that your employees are not left without coverage when your health plan is replaced by a QSEHRA.
Health Reimbursement Arrangements, or HRAs, have many advantages.
Tax-free benefits are available to both you and your workers when you provide HRA options to employees.
HRA money is not released to your employees until after it has been paid. As operating capital, it remains yours. This money doesn’t need to be placed with anyone else.
The HRA benefit can be designed by employers in a way that suits their needs and includes what costs you’re willing to cover.
The workers’ health coverage is not affected if they change their status to contractors or leave the business. The QSEHRA allows the employee to control and own their insurance. The employee, not the employer.
It is not the desire of all employees to have to choose and research their own plan. Some workers will need additional help to make the switch.
You can get help from your HSA for America Benefits Manager if this happens. This ensures that no worker gets left behind.
Have your workers call 800-913-0172 or click on this link for an individual, personalized service.
Click Here To Learn More About Alternatives to Employer-sponsored Health Insurance for Arkansas Small Businesses
The Advantage of Direct Primary Health Care
Direct Primary Care plans have become a popular alternative to traditional healthcare in Arkansas as well as across the US.
A membership model works for a fixed, monthly, affordable fee (like a gym membership), your employees are able to receive as much care as they desire, in-person, via telehealth or otherwise.
DPC’s monthly membership fees start at just $80 and are a viable option for people to take care of their health, without having to pay copayments or insurance coinsurance.
DPC plans offer members unlimited access for routine primary, chronic, and preventive care.
Some of the services that are commonly offered by primary direct care include:
The following are some medical services provided by direct primary care doctors.
- Preventive care. DPC’s doctors focus on preventive medicine. They offer services including routine health checks, vaccinations, and screening for various diseases.
- DPC doctors offer acute care to patients with minor injuries or illnesses such as infection, colds, flus, minor skin disorders, and minor injuries.
- Manage chronic disease. DPC doctor help you manage chronic conditions, such as arthritis, asthma, diabetes, and hypertension. They offer continuous monitoring, ongoing care, and can adjust treatment plans as needed.
- Comprehensive physical exams. DPC doctors provide comprehensive physical exams that help assess health overall, identify possible risks, and offer personalized health recommendations.
- Urgent care. DPC’s doctors can often provide urgent care the same day or even next day.
Appointments allow patients to get prompt medical attention when they have non-emergency problems.
- Lab and diagnostic services. DPC doctors can offer or coordinate laboratory testing, such as bloodwork, urine analysis and imaging tests (X-rays and ultrasounds) along with electrocardiograms.
- Management of medication. DPC doctors can prescribe medication, track their effectiveness and adjust as necessary. The doctors also offer education on the proper use of medications.
- Mental Health Services As part of comprehensive health care, many DPCs offer mental health services. DPC physicians may offer counseling, therapy and refer patients to specialists in mental health when needed.
- Minor procedures. DPC physicians are sometimes trained to do minor procedures right in the office. These include suturing lacerations and removing skin lesions or moles. They can also perform joint injections.
- Referrals to specialists and hospitals. DPC doctors serve as patient advocates, coordinating care with hospitals, other healthcare providers and specialists when a referral is necessary.
Since there is no insurance provider involved, you don’t have to worry about copays, coinsurance, or deductibles. Everything is covered by the monthly subscription. The monthly subscription covers everything. This allows cash-strapped employees to get the immediate care they require. The workers will never have to delay seeing a doctor due to the cost of the co-pay or deductible.
Patients can select supplementary plans to cover additional services, such as accident insurance, high-deductible health plans or health sharing plans. DPC members can choose to cover routine health care at a lower cost by opting for health sharing plans instead of traditional insurance.
HSAs (Health Savings Accounts)
It is possible to lower health insurance rates by using HSAs.
Arkansas residents, and Arkansas-based businesses are desperate for any kind of tax reduction. Employer contributions to Health Savings Accounts for employees are fully deductible from Arkansas Corporate Income Tax as compensation.
HSAs let individuals set aside money before taxes to help pay future medical bills. HSAs may be contributed to by employees as well as employers. However, the limit is set each year by Congress to adjust it to inflation.
The money in an HSA grows tax deferred, and any withdrawals made to cover qualified medical expenses are tax free.
HSA Eligibility for Arkansas Small Business Health Insurance
Employees must be enrolled in an HDHP to qualify for a HSA or employer contributions pretax.
The IRS has defined a high-deductible health plan for 2023 as a plan that includes a minimum deductible of $1,500 per individual and $3,000 per family.
The total annual out of pocket expenses for an HDHP (including copayments and coinsurance), cannot exceed $7,500 per individual, or $15,000 per family. This limit does not apply to services provided outside of the network. ).
Can I combine HSAs & health sharing?
HSA America offers only the HSA-SECURE plan.
HSA SECURE Plan provides a way for you to enjoy the advantages that come from combining a healthcare savings account and the advantages of sharing health costs.
However, to enroll your employee in the program, they MUST be self-employed, own a small business, or both.
HSA SECURE cannot be used by employees with a straight W-2. HSA SECURE could work well for your employee or their spouse if they have their own small business, side gig, or freelance project, are healthy, and don’t suffer from any pre-existing medical conditions.
As a small-business owner, you may want to consider the HSA Plan SECURE as an option that can save both your and partners money.
HSA SECURE is only available to employees who enroll on their own. If they already have an HSA established, then you can still make contributions on their behalf up to the limit Congress sets each year.
How Are Health Benefits Taxed?
After you’ve learned a little bit more about all the other options that are available for small business owners in addition to health insurance as it is known today, we have a short table showing how they will be taxed.
Plan Type Employer Workers
Traditional health insurance premiums Tax deductible. May qualify for a tax credit (see below) Non-taxable
HSA contributions Tax deductible
Pre-tax, up to certain limits. No income limitations.
Health sharing costs Tax deductible as a compensation expense Taxable as ordinary W-2 income
Health reimbursement arrangements Tax deductible Benefits are non-taxable to the employee
HSA withdrawals N/A
Withdrawals for qualified medical expenses are tax-free. Otherwise taxable as ordinary income.
A 20% penalty for non-qualified withdrawals applies up until age 65.
Direct primary care costs
Tax deductible as a compensation expense Taxable to the employee
Take Care of All the Levels in the Pyramid
Employee Health Benefits should be designed to cover the entire Employee Healthcare Pyramid. From routine prevention, primary healthcare access and early detection, to catastrophic accidents, it must include everything from the Employee Healthcare Pyramid.
On the left, you will find a list of common solutions based on traditional insurance that can be used to address the different levels of the Care Pyramid.
While on the right, you will find a list of more affordable alternatives to offer meaningful protection at every level of the Pyramid.
The design of a good plan provides affordable options for employees at every level. This ensures that employees don’t have to put off or delay care for lack of funds.
It is possible to design a personalized plan with the help of your personal benefits manager. This can be done for less than the traditional cost of group insurance.
Small Business Health Care Tax Credit
Small Business Health Care Tax Credit enacted along with ACA allows for some small business owners to receive a federal income tax credit equal to up to half of their health insurance expenses.
Small businesses, with no more than 25 employees who hire low-wage workers are eligible for this program.
The credit is available to both for-profit companies and nonprofits.
* You have fewer than 25 employees, and the average salary is around $53,000. (Not including all owners’ salaries). When calculating average salaries and the number employees, the owner is generally excluded. Also, “full-time equivalents (FTEs)” are used to determine the number of workers. It means that 2 half-time employees are equal to 1 full-time employee.
* Employers must cover at least half their premium costs
* Offer Affordable Care Act-qualified coverage available on the state exchange, in Arkansas’s case, on Arkansas Health Insurance Marketplace (AHIM).
If an employer has more than 25 employees, or if the average salary is $53,000 or above, then they will no longer be eligible for tax credits.
How can I get credit for my purchase?
Tax-exempt small businesses must submit Form 990T for tax purposes, even if they are not required to do so.
You are exempt from taxation on contributions made to your employee’s health coverage
This year, I haven’t paid taxes on my business. Am I still eligible to claim the credit?
Yes. The tax credit may be used as a way to reduce income tax liabilities incurred in the prior year, or it can also be carried forward and offset over 20 years.
The credit can be refunded if you are a business that is exempt from taxes.
For more information on the Small Business Health Care Tax Credit, consult your tax advisor.
Combine Arkansas Small Business Health Insurance Plan Strategies
When it comes to maximizing your coverage, combining different programs is a wise move.
Combining a variety of health care packages allows employers to reduce healthcare costs and provide complete coverage for their employees.
You could combine Direct Primary Care Plans (DPCs), for the normal care of primary patients, with health plans that are low-cost and cover catastrophes.
This alternative to group health coverage can make it more affordable either for your employer or your staff.
It is possible to offer employees more choice and flexibility by offering them the opportunity of a Health Savings Account.
What to do Next?
To take the best action now, you should conduct an employee census and then get in touch with us to receive a complimentary analysis of your business’ health.
A Persona Benefits manager from HSA for America will be assigned to you. This personal benefits manager will talk to you about your staff and their families, discuss your needs and budget, assess your employees’ contributions, and take into account any preexisting medical conditions.
Many of the PBMs we work with are also successful businessmen and entrepreneurs. The PBMs understand the needs of business owners and know what is required to retain and recruit top talent.
Do I have to offer health insurance AND health sharing together?
It is possible to offer the two options together, and let employees choose what plan best fits their needs.
You may fall short of the required minimum rate of participation if you have too few employees participating in a health plan. HRAs can be used to reimburse employees for their individual health coverage, which is close to that cost.
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Arkansas Small Business Health Insurance: FAQs
What’s the Difference Between Health Insurance and Health Sharing for Small Businesses?
Health sharing is when members contribute to a common shared fund, while in the traditional insurance industry health insurance covers medical costs directly.
What are the benefits of Health Savings Accounts for Arkansas employees?
HSAs are a way for individuals to put money aside before taxes to pay future medical expenses. Employees and employers can both contribute to HSAs, allowing for tax benefits and savings on future healthcare costs.
Employers in Arkansas can contribute to employee HSAs.
You can make contributions into your employees’ HSAs. However, there are limits set annually by Congress.
Arkansas allows employers to deduct contributions made by them towards HSAs when calculating state income tax.
Yes. Arkansas lets employers deduct the full amount of their contribution to an employee’s HSA as part of their compensation
Offer Direct Primary Care Plans (DPCs) along with other Coverage Options for Small Businesses in Arkansas.
Combining DPC plans with lower-cost health coverage, like Health Share Plans, provides comprehensive and affordable healthcare solutions for both small businesses and their employees.
What exactly is an HRA and how do they work?
HRAs allow employers to reimburse their employees for certain medical expenses, which aren’t covered by the employee’s insurance. Employers set the criteria for what is eligible, and they contribute accordingly.
HRAs can be combined with other options for coverage, such as health sharing plans and individual health insurance policies.
HRAs are compatible with other insurance options. HRAs can be used to reimburse employee premiums on individual policies. HRA funds cannot be used directly to reimburse employees for the costs of health sharing plans.
Do health-sharing plans have waiting periods for conditions that preexist?
Some health sharing plans do have a waiting period for conditions that are pre-existing before they begin to cover you. For more details on specific plans, it’s best to consult the plan guidelines.
What is the Small Business Health Care Tax Credit and how do I claim it?
For-profit small businesses can claim the tax credit on their annual income tax returns with IRS Forms 8941, while those that are tax exempt must submit a Form 990T.
HSA for America cannot provide you with tax advice. Employers are encouraged to speak with their accountants for more details about claiming this credit.
Does a small business that does not have any Arkansas taxes owe be able to claim the Small Business Health Care Tax Credit in Arkansas?
Even if the business does not owe any taxes for a given year, it can still carry back the Small Business Health Care Tax Credit to offset the income tax liability of the previous year.
In Arkansas, are maternity benefits included in health sharing plans?
Arkansas’s health insurance and health-sharing plans include benefits for prenatal and postnatal health care. While some plans do not allow cost sharing for children born out of wedlock, others may.
Are there restrictions on how large a small business can be to qualify for the Arkansas Small Business Programs?
QSEHRA (Qualified Small-Employer Health Reimbursement Arrangement) is for employers who employ fewer than 50 people. Other HRAs are available if the company has over 50 employees.
You’ll also be required by the ACA to either provide a qualified insurance plan for employees or pay a fee. Consult your Personal Benefits Specialist if, within the next year, you will be hiring more than 50 full-time employees or their equivalent. The plan that you design could change.
How can I decide which option of cost sharing and health insurance is best for a small business in Arkansas (Arkansas)?
You don’t have to go it alone. A Personal Benefits Manager can be contacted. They can provide a complimentary analysis and recommendations based on the specifics of your needs, including budget, employee count, and pre-existing conditions. The experts can design a plan to maximize the value of your employees, while controlling costs. This will help you stay competitive
Disclaimer: All information on this website is relayed to the best of the Company's ability, but does not guarantee accuracy. Information may be out of date. The content provided on this site is intended for informational purposes only and does not guarantee price or coverage. This site is not intended as, and does not constitute, accounting, legal, tax, and/or other professional advice. Determination of actual price is subject to Carriers.