Arkansas Small Business Health Insurance Options

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. 

2.) Flexibility.

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.

Mandatory Coverage

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.

Pre-Existing Conditions

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.

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. 

HSA Secure: Click Here to Learn More!

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.