The best health insurance for a small business in Georgia will depend on their size, location, and budget.
Owners of very small businesses in Georgia have just a few options when it comes to providing health benefits to their employees, and in this article we’ll go through each choice, and explain strategies that can make health insurance much less expensive for your small business.
Health Insurance Premiums are too High for Small Business in Georgia
As business owners across Georgia know – the cost of providing health insurance to employees and their families is staggering. Georgia is home to thousands of very small businesses with 30 employees or less – and these businesses struggle the most to provide health benefits.
As of 2021, the average cost of a group health plan covering an employee and his or her family was $21,381, according to data from the Kaiser Family Foundation. Of that, employees cover $6,174, on average, leaving employers to pick up $15,207.
The cost for Georgia employers is substantially higher than the national average: Total average premiums for a group health insurance plan averaged $22,282 in 2021, with employers paying an average of $18,094 per enrolled employee.
Obviously, many Georgia small businesses find these costs prohibitive. Furthermore, Big Insurance and government combine to make health insurance policies more bloated and inefficient by mandating more and more coverage that workers don’t want or need.
Fortunately, there are several lower-cost alternatives to traditional group insurance plans – some of which Big Insurance doesn’t want you to know about.
Thousands of employers are finding out that they can save money compared to the plans foisted on them by the big health insurance giants, and help protect workers against the high cost of health care.
So before we talk about group health insurance, I want to share some of the biggest ways your company can add important health benefits for employees – at a fraction of the cost.
Health Sharing Plans: The Alternative to Health Insurance for Small Business in Georgia
Health Sharing Plans (HSPs) are an increasingly popular low-cost alternative to traditional health insurance. They can provide employers with a more efficient and affordable way to offer health benefits to workers and their families.
First, a clarification is in order: Health sharing is not health insurance, and you should not confuse or conflate the two. Health sharing is an increasingly popular lower-cost alternative to health insurance. In health sharing,
Non-profit organizations called “health sharing ministry organizations” facilitate the voluntary sharing of eligible health care expenses among groups of like-minded people
Health sharing organizations are regulated differently than health insurance companies. They are also not required to cover all ten minimum essential coverage elements as health insurers are required to under the Affordable Care Act.
Health Sharing plans may impose more stringent restrictions on pre-existing conditions compared to health insurance plans.
Because they can be more selective with both the coverage they provide and the pre-existing conditions they will service, health sharing plans typically reduce out-of-pocket costs by a large amount compared to the unsubsidized cost of comparable traditional health insurance plans.
How Health Sharing Plans Work
Employers and employees contribute to the health sharing pool. In return, the health sharing organization facilitates the cost sharing process across the membership.
The chief advantage of health sharing plans for employers and employees alike is their reduced cost: they are generally between 20% and 50% less expensive than traditional major medical insurance.
Unlike HMO and PPO health insurance plans, there are often no ‘in-network’ restrictions or ‘out-of-network’ penalties. With many health sharing plans, employees are free to choose their own doctors.
The primary disadvantage is that unlike major group medical plans, HSPs may impose significant waiting periods before they will reimburse expenses arising from pre-existing conditions. One possible strategy: Some employees who don’t have pre-existing medical issues could join the low-cost health share membership.
Meanwhile, you could offer your employees who do have pre-existing medical conditions in their families an HRA to reimburse them for the costs of buying their own individual or family health insurance plan.
NetWell is our most popular and best-selling healthshare plan at present. They have a great balance of features, benefits, and price.
MPB also has a creative and innovative healthshare option, MPB Secure, which is structured to maintain eligibility as a high deductible health plan, or HDHP. That means enrollees are eligible to make new health savings account (HSA) contributions. Or you can make them on the employee’s behalf.
The combination of a low-cost health sharing plan with the tax savings and enhanced control of a health savings account make for a potent but affordable and competitive employee benefits solution.
Compare Pricing on the Best Healthshare Plans Available
Direct Primary Care (DPC) Plans
Another option that is growing in popularity is to sign your employees up with a local DPC membership.
Direct Primary Care, or DPC, is an alternative healthcare model where patients pay a flat membership fee in exchange for unrestricted access to a primary care doctor.
With membership costs as low as $80 per month, DPC is becoming a popular and viable way for Americans to maintain their health without having to worry about copays or coinsurance.
How Direct Primary Care Plans Work
- The patient or their employer chooses a Direct Primary Care physician in their area and signs up for a membership. A flat-rate monthly fee, typically between $75 and $110, is paid directly to the DPC facility. In group plans, the employer pays the DPC practice.
- The patient enjoys unrestricted access to routine primary, preventive, and chronic care* services. The structure is similar to that of a health club membership: Patients can access primary care care services as often as they need – at no cost to them.
- There are no co-pays, co-insurance, or deductibles. So workers don’t need to put off needed care – and risk needing more expensive medical intervention later on.
- The patient chooses a supplemental plan to cover the things that DPC does not, like ER care, hospitalization, and prescription drugs. Because routine care is covered by the DPC membership, the patient can choose a low-cost option like a high deductible health plan, a health sharing plan, or accident insurance. (We explore DPC-friendly options further down in this guide).
*Not all DPC facilities treat all chronic health conditions; Be sure to check with your DPC provider before signing up.
It’s important to understand the limitations of direct primary care. DPC plans do not include ER visits, hospitalizations, surgeries, or specialist care. They aren’t stand-alone solutions, and are not designed to cover catastrophic care.
Workers who make too much to qualify for Medicaid will need some additional protection, either from a health sharing plan or a traditional health insurance solution.
Fortunately, employers can help employees get that additional protection – or any other healthcare services they need – using strategies described below.
Health Reimbursement Arrangements (HRAs)
Rather than purchasing a group health insurance policy, many small businesses find that a Health Reimbursement Arrangement works better.
An HRA is an employer-paid benefit that reimburses employees for the cost of individual health insurance as a tax-free benefit. With an HRA, employees get to choose their own plan – one that is totally portable and could go with them if they ever leave the business.
Unused amounts are not forfeited, as with flexible spending accounts (FSAs), but may be carried forward and available in future years.
HRAs can also function similarly to health savings accounts: They can help employees pay medical expenses that would otherwise come out of pocket. The employer can choose to make funds available for deductibles, co-pays, prescriptions, durable medical equipment, and other medical necessities that the health plan doesn’t cover.
In medical insurance, one size does not fit all. Using an HRA to reimburse some or all of the cost of private medical insurance allows your workers to select the plan that’s best for them and their own families, and provides greater flexibility for the business owner.
Meanwhile, all company contributions to HRAs are 100% tax deductible to the employer, and tax free to the employee.
There are no plan minimum contributions or forward commitments. You can design your HRA to suit your budget. Unlike traditional health insurance, HRA programs are completely owned and defined by the employer.
You alone decide how much money to allocate to your HRA program every year. Not some third party regulator or entity that doesn’t know your employees’ needs.
Furthermore, you don’t even need to pre-fund your HRA in advance. You don’t commit any funds until an employee actually presents a qualified medical expense for reimbursement. This helps preserve cash flow for business operations.
Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs)
Small employers (usually those with fewer than 50 employees) and that don’t offer a group health policy may qualify to use a special type of HRA called a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA).
The QSEHRA (pronounced “cue Sarah”) allows businesses to reimburse workers tax-free for certain health care expenses.
Examples of reimbursable expenses include:
- Health insurance premiums
- Durable medical equipment
- Prescription drugs
- Medical-related travel expenses
QSEHRA benefits are only allowable for employees who maintain minimum essential coverage, as defined by the Affordable Care Act. These include individual plans employees buy through the ACA Marketplace.
QSEHRAs allow qualified small employers to help employees get the coverage they need without having to manage an entire group health plan themselves. Employees can buy their own plans.
The law places a cap on QSEHRA benefits per employee. As of 2022, the IRS caps allowable reimbursement at $5,450 per year ($454.16/month) for single employees, and $11,050 per year ($920.83/month) for families, as of 2022.
QSEHRA Caps for 2023 will be announced in November.
Employer Eligibility for QSEHRAs
To qualify for QSEHRAs, employers must meet three criteria:
- Have fewer than 50 full-time employees
- Provide the arrangement on the same terms to all full-time employees (reimbursement amounts may only vary based on age and the number of individuals covered).
- Not offer a group health plan, like SHOP coverage or a flexible spending account (FSA).
Individual Coverage Health Reimbursement Arrangements
Individual Coverage Health Reimbursement Arrangements, or ICHRAs, may be a good alternative if your business doesn’t qualify for a QSEHRA.
You can decide on a monthly HRA benefit for your employees. Then you can reimburse your workers for qualified medical expenses up to that monthly limit.
You can offer a formal group health plan of your own. Your workers are free to select their own health plan.
For example, they may choose a plan that allows them to choose their own doctor, includes a drug they need on their plan’s formulary, add vision or dental plans, enroll in a Direct Primary Care plan on their own, or select a lower-cost health sharing plan for catastrophic benefits.
Note: If an employee accepts HRA money, they may disqualify themselves for a health insurance subsidy if they want to buy an Affordable Care Act Marketplace health insurance policy for themselves. Make sure your employees understand that limitation.
At HSA For America, we pride ourselves on making it easy for small business owners to understand and administer health reimbursement arrangements for all kinds of businesses and employees.
QSEHRAs vs. ICHRAs
While QSEHRAs and ICHRAs have a lot of elements in common, it’s important to understand how they differ:
|Limited to fewer than 50 full-time equivalent employees||Available to employers of any size|
|May not offer group health plans and QSEHRA at the same time||Employers may offer ICHRAs with or without a group health plan.|
|Must offer QSEHRAs to all full-time employees. No discrimination between classes allowed, except for family size||Employers can choose which classes of employees qualify for what ICHRA benefits|
|Benefits capped at $5,450 ($454.16/month) for single employees and $11,050 ($920.83/month) for families, as of 2022. (Caps for 2023 will be announced in November.||No cap on ICHRA benefits.|
Frequently Asked Questions
Can Health insurance companies require preauthorization in Georgia?
Yes, but not for emergency care. Health insurance carriers can only require pre-authorization for care once the patient is stabilized.
Does Georgia mandate that insurance companies provide any additional benefits beyond the ten minimum essential coverages defined in the Patient Protection and Affordable Care Act?
Yes. In addition to the federally-required minimum essential coverages (MEC) in the Affordable Care Act, all Georgia insurance carriers licensed to sell in Georgia must provide the following benefits:
- Bone marrow transplants
- Clinical cancer trials
- Morbid obesity treatment
- Clinical cancer trials
- TMJ disorder treatments
- Off-label prescription drug coverage for life-threatening conditions
What are my health insurance options if I’m self-employed in Georgia?
If you’re self-employed and you have no employees other than yourself, you can enroll in an ACA-qualified Georgia Health Insurance Exchange program by calling a Personal Benefits Manager at HSA for America.
Depending on your income and family size, you may be able to qualify for a health insurance subsidy to help make health insurance for yourself and your family more affordable.
You can also consider a high-deductible health plan (HDHP), which would allow you to make tax-deductible contributions to a health savings account (HSA), one of the most powerful-advantaged savings vehicles in the tax code.
You can also choose a healthsharing plan, which you can combine with a direct primary care plan for even more protection and savings.
Self-employed Georgians with no statutory employees other than themselves cannot purchase a SHOP plan.
However, if you’re self-employed, and you have one or more full-time employees (excepting your spouse, a business partner, or a family member), you may be eligible for a SHOP plan.
Does insurance cover maternity benefits in Georgia?
Yes. All Affordable Care Act-qualified health insurance plans cover maternity benefits and medical care for newborn children, as do all Medicaid plans. This is true even for pregnancies that begin prior to enrolling in the plan. However, coverage levels within different plans vary.
Most healthsharing plans provide maternity benefits, as well. However, they may impose a waiting period, or only cover pregnancies that begin after the mother enrolls in the plan.
Some healthshare plans may require that the patient is married. You should check your healthsharing plan guidelines for specifics.
Am I required to offer health insurance to my employees?
Only businesses with 50 or more full-time employees are required to offer health insurance. HSA for America specializes in helping businesses with 25 or less employees find more affordable ways to offer health benefits to their employees.
Can I offer healthshare memberships to my employees in Georgia?
Yes. You can provide health insurance as a tax-free fringe benefit, but if you provide a healthshare membership it will be taxed the same as other income.
Compare Pricing on the Best Insurance Plans Available
Traditional Group Health Insurance
And finally, we have traditional group health insurance, which we’re all familiar with.
While we’re critical of the health insurance industry in general, the traditional approach has advantages, too. And sometimes, despite the higher costs and red tape, a traditional health insurance group option is the best fit.
It depends on your budget and your work force.
Unlike health sharing companies, health insurance carriers have to take all applicants, regardless of pre-existing conditions. This is part of the reason they are more expensive than health sharing plans.
But if you have workers with pre-existing conditions like uncontrolled diabetes, heart problems, or other health issues, and who would be excluded from health sharing plans, then traditional health insurance may be the way to go.
Group Health Insurance Rules for Small Businesses
With group health insurance, employers have to jump through a few hoops:
First, you’ll need a minimum participation rate. At least 70 percent of your eligible workers must participate in the plan. Some employees decline to participate, either because of the out-of-pocket costs, or because they have access to a better health care plan via their spouse.
The participation rate requirement may affect whether you can offer a health sharing plan alongside a traditional health insurance option. If you offer both, but too many people opt for the lower premium health sharing option, you could fall short of the 70% participation requirement.
Call us and we’ll help you work through these and other benefits design and compliance issues.
The Small Business Tax Credit for Health Insurance
One advantage that starting a traditional group health insurance plan has for smaller employers is the Small Business Tax Credit. If your business has 25 employees or fewer, your business may qualify for a tax credit of up to 50% of the business contributions to the plan.
So that can help lessen the blow.
You may be eligible for this credit if:
- You have fewer than 25 full-time equivalent (FTE) employees
- Your average employee salary is about $56,000 per year or less
- You pay at least 50% of your full-time employees’ premium costs
- You offer SHOP coverage to all of your full-time employees. (You don’t have to offer it to dependents or employees working fewer than 30 hours per week to qualify for the tax credit.)
Health Savings Accounts (HSAs)
Health Savings Accounts are a powerful way for workers to save money for future health care expenses and save on taxes at the same time, and is another strategy that many small businesses in Georgia have incorporated.
Contributions to HSAs are made with pre-tax dollars, by either the employee, or with employer contributions as well. Assets in these accounts grow tax free as long as they remain in the account. And withdrawals (distributions) are tax-free, provided the money is used for qualified health care expenses.
There is a 20% penalty if workers tap HSA accounts and don’t have a corresponding qualified medical expense before age 65.
But if the worker remains healthy and doesn’t need the money for health care, then it becomes available penalty-free at age 65 to supplement the worker’s retirement income, or for any other purpose. They just pay income taxes for non-medical withdrawals, like they do with a traditional IRA or 401(k).
For your workers to qualify for new contributions to health savings accounts, they must be enrolled in a qualified high deductible health plan.
These are (usually) traditional insurance plans that are available at a much-reduced premium compared to similar plans with lower deductibles. At least one plan uses a health sharing approach to lower premiums while still qualifying members for HSA contributions. Call us for details!
But if workers or employers take the money they save on premiums, and route these dollars pre-tax to a health savings account, it doesn’t take long before they have a year or two worth of deductibles sitting in a health savings account, compounding tax free until the day they need it.
Many group and individual health insurance plans are HSA-qualified, and there is at least one healthshare that has a component that makes it HSA-qualified.
Many employers find that providing multiple programs in combination helps them control health care costs to the business while providing workers with the protection they need, and the benefits that help retain and recruit quality employees.
For example, you can combine a low-cost, affordable health sharing plan that includes catastrophic events like ER visits, hospitalizations, specialist care, and surgery alongside a DPC plan for predictable and routine primary care. This will typically be much less expensive than group health insurance.
Or you could let employees choose between joining a healthshare or getting an individual health insurance plan, and the business could make an HSA contribution for those who choose an HSA-qualified plan. You can read more on our Health Insurance for Small Business Owners page.
Take Action Now!
Request a Group Quote for Your Small Business
Don’t let another great employee leave because they have to take another job from another employer for the health benefits. And don’t go another month putting employees and their families at risk.
We’ve helped hundreds of small businesses just like yours provide desperately-needed, competitive health care benefits for workers and their families – for less than they thought possible.
Obviously, every business is different. That’s why we have a team of very experienced, knowledgeable Personal Benefits Managers.
I can help you design a plan that’s specifically designed for your business, your employees, and their families.
To get started, just click here, and book an appointment.
Or if you prefer, call us directly at 800-913-0172, choose your state, and you’ll be directed to a Personal Benefits Manager that handles that state.
Consultations with me are always free.
Hi! I’m Misty Berryman, and I’m one of your Personal Benefits Managers. I like working with HSA for America because we’re creating solutions to healthcare problems. Our focus on money-saving alternatives like HSA plans and health sharing programs, and the variety of health share programs we offer, are what set us apart. Read more about Misty on her Bio page.