Health Insurance for Small Business 2023:

The Only Guide You’ll Ever Need

Nearly everything you need to know about creating an affordable
health benefit for employees

By Wiley Long III, President – HSA for America
Reviewed by Lou Spatafore
Fact checked by Misty Berryman – Updated 11/15/2022

Health Insurance for Small Business 2021

Thinking about getting health insurance for your small business employees, but don’t know where to start? This step-by-step primer breaks everything down into simple, easy-to-understand terms, all backed by the knowledge and experience of our in-house small group insurance experts.

In this guide, small business owners can learn everything they need to know about the five options that they have for providing health benefits, and the pros and cons of each. 

These options include:

  • Small employer Health Reimbursement Arrangements (HRAs)
  • Traditional group health insurance
  • Group health sharing plans
  • Employee Health Savings Accounts (HSAs)
  • Direct primary care plans (DPC)

Afterwards, we’ll offer a few tips on how to choose an insurance plan for your small company.

Request a Group Quote for Your Company


In This Health Insurance for Small Business Guide:

Small business health insurance options
[Basic overview]

HRAs for Small Business

Group Health Insurance for Small Business

How to Choose the Best Health Benefit for your Small Business

Health Sharing Plans for Employees

Complete Guide to Direct Primary Care

Small Business HSA About Us

ABOUT US

HSA for America Logo

Since 2004, HSA for America has been helping individuals and small business owners navigate the complex maze of health coverage. 

We’re big fans of innovative, hassle-free, and non-traditional options, and we will never stop looking for a better deal.

Our team’s specialized knowledge about HRAs, HSAs, and health sharing plans can make health benefits a reality for your small business. No matter which solution you’re interested in, we can help make group benefits easier, faster, and more affordable.

Small Business Health Insurance Options
[Basic Overview]

There are a number of different group options available to small employers. Unfortunately, understanding the differences between them is easier than you think.

As an employer, there are five options to consider: (View Story)

small business check markOPTION ONE: Employees Obtain their Own Coverage

If your business has fewer than 50 employees, then you are not required to offer access to health insurance. But as many small business owners can tell you, it can be difficult to grow a young company without a competitive benefits package.

On the other hand, sometimes the smarter financial move is to not offer health benefits. For example, some low-income employees might qualify for an ACA subsidy on the individual market, making it the cheaper option. Or perhaps some of your employees are already covered by a spouse’s group plan. 

As you’ll find out in this guide, health insurance for small businesses is more affordable than you think. It also creates access to a number of valuable tax benefits for employer and employee alike.

PROS

CONS

 
small group prosIt’s easier than choosing and administering a health benefit small group consOffering no health benefits can make it hard to attract new talent
small group prosYour employees might already be covered, or eligible for a cheaper plan with an ACA tax credit. small group consWage increases (as opposed to some benefit offers) are taxable to the employee

small group health insurance

OPTION TWO: Small Group Health Insurance

With small group health insurance, the employer chooses a policy plan and then pays a fixed premium for every enrolled employee. The employee pays their share from their paycheck, and is covered as long as they are employed.

It works just like a plan purchased on the individual market, only far more affordable in some cases.

Some group plans are also HSA-qualified. This means that you can offer an additional tax-free benefit in the form of a health savings account (HSA).

PROS

CONS

 
small group prosEmployer and employee contributions are both tax-deductible small group consGroup coverage is not always more affordable than individual plans
small group prosOffering health insurance can reduce turnover, increase productivity, and attract new talent to your company small group consEmployees have less choice (or no choice) in their plan and coverage options
small group prosBusinesses with fewer than 25 employees may be eligible for a big tax credit worth up to 50% of total plan contributions  

HRAs for small business

OPTION THREE: HRAs for Small Business

Health reimbursement arrangements, or HRAs, are a common benefit option for businesses with fewer than 50 employees. Small business HRAs let employers compensate their workers for their own individual health plans.

In most cases, reimbursements are used for plan premiums. However, they can also be used for eyeglasses, dental insurance, and other out-of-pocket costs. 

HRAs are popular with small companies because they are highly flexible. The employer can choose how much to contribute each month, without having to worry about unexpected fluctuations in cost.

HRAs are popular with employees because they allow the individual to choose a plan of their own, as opposed to being pigeonholed into a plan that isn’t a good fit.

PROS

CONS

 
HRA prosEmployers choose how much to contribute (there are no contribution minimums) HRA consHRAs require the employee to have their own individual coverage
HRA prosEmployers can set the rules of their own HRA, making them very flexible HRA consMost HRAs are incompatible with the ACA subsidy, meaning some employees may have to choose between the two
HRA prosEmployees get to choose their own plan, and take it with them if they are no longer employed with the company  

Health Sharing Plans for Small Business

OPTION FOUR: Health Sharing Plans for Employees

For businesses and employees alike, health sharing for employees can save a bundle on monthly premiums. In fact, the average health sharing plan is about half the cost of unsubsidized health insurance.

Health care sharing is not actually health insurance at all. Instead, it is a membership-based cost sharing program. In exchange for a monthly contribution, members can have their medical expenses shared according to a fixed-price reimbursement model.

But like any health care strategy, health sharing isn’t for everyone. These plans come with waiting periods for pre-existing conditions, and coverage is usually less comprehensive.

PROS

CONS

 
Health Sharing Plan prosHealth sharing is one of the most affordable benefit options available Health Sharing Plan consHealth sharing is not ideal for individuals with significant medical needs
Health Sharing Plan prosHealth sharing is a unique benefit opportunity only available to small employers Health Sharing Plan consHealth sharing contributions are not tax-deductible

Health Sharing Plans for Small Business

OPTION FIVE: Direct Primary Care

Direct Primary Care, or DPC, is an alternative healthcare model where patients or their employers pay a flat monthly or annual membership fee in exchange for unrestricted access to a primary care doctor.

When offered as an employee benefit, workers can see their primary care provider as often as needed for preventative care and maintenance of chronic conditions. Their PCP can refer them to specialists for more advanced care, as needed. There are no co-pays, co-insurance, or other out-of-pocket costs.

DPC works best in conjunction with a high-deductible health insurance plan or health sharing plan, each of which may help with costs for emergency or acute care or specialist care beyond the scope of the PCP’s practice.

PROS

CONS

 
Health Sharing Plan prosEmployees and their families can get more time with doctors Health Sharing Plan consDPC plans don’t cover ER visits
Health Sharing Plan prosReduced costs to employers and workers Health Sharing Plan consDPC does not cover prescription drugs. However, standalone plans are available, or the company HDHP or health sharing plan may assist with drug costs.

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The Best Small Business Health Benefit for your Company

Next up, we’ll dive a little deeper into these options one-by-one, examining the benefits and potential pitfalls of each one.

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Group Plan Health Insurance for Small Business – Comprehensive Coverage to Boost Your Benefits Package

Just because your business is small doesn’t mean that you can’t afford a traditional group plan.

In fact, there are some significant financial benefits to group health insurance that small business owners tend to overlook. 

For one, both the employer and employee can pay their portion of the premium with pre-tax money. And if you qualify for it, the Small Business Tax Credit is worth up to 50% of employer contributions.

But small group insurance isn’t for everyone. It can be cost prohibitive for some companies, and limits the amount of choices that your employees have regarding plan options. 

How do small group health insurance plans for small business work?

Group health insurance is perhaps the most common form of employment benefit. With small group health insurance, the employer chooses a plan or selection of plans to offer their employees.

Next, the employer then decides how much they want to contribute to the cost of the plan. The employee pays the rest of the premium out of their paycheck with pre-tax dollars.

How group health insurance for small business works in 4 easy steps:

Health Insurance for Small BusinessThe employer chooses a plan, or a selection of plans.

This is the most difficult part of the whole process, but can be easy when working with an advisor. Choosing a plan means considering the needs of your employees and dependents. What kind of benefits will they need, and who will be covered? Will the plan cover dependents?

monthly premiumEnrolled employees will have a monthly premium, a set deductible, and an out-of-pocket maximum.

 This information is all available beforehand, and can help convince an employee to enroll.

Health Insurance for Small Business ContributionThe employer decides how much to contribute.

This can be a number that makes sense for your company’s financial needs. Usually, premiums for small group coverage are split in some way between the company and the employer.

pay check deductionThe cost of the premium is a shared, pre-tax deduction from the employee paycheck.

After the plan is chosen and the employees are enrolled, administration is a piece of cake. As long as the employee continues earning a paycheck, they will remain covered. Payments are automatic and handled via payroll. 

Pros and Cons of Small Group Health Insurance

Small group insurance plans are quite varied in terms of cost and coverage options. But in general, you can count on group insurance plans to come with the following pros and cons:

PROS of Small Group Health Insurance

 

group health insurance for small business pros
The employer decides how much is contributed.
Because businesses with fewer than 50 employees are not required to provide access to health insurance, there is no minimum contribution limit if they do. That means that once you have a plan picked out, you can decide precisely how much the company will contribute. This is unlike larger group options which require a contribution of 50% or more.
group health insurance for small business prosGroup plans make it possible to set up an employee HSA. Health savings accounts (HSAs) are gaining momentum as one of the most popular investment strategies of the decade. These flexible tax-deferred accounts give your employees a better way to save money for healthcare. Because of this, HSAs for small business are becoming a staple in benefits packages across the country.
group health insurance for small business prosSome businesses are eligible for a big tax credit. Depending on which state you’re in and which provider you are purchasing from, you might be eligible for the Small Business Health Care Tax Credit. This is a major tax benefit that can be as much of 50% of your overall contributions. Not everyone is eligible, and the credit is only available for the first two years. However, the initial savings can make it easier to launch a new group plan. You can use the Healthcare.Gov website to estimate your Small Business Health Care Tax Credit.
group health insurance for small business prosThere’s no special enrollment period for group plans. Unlike health plans purchased on the individual market, business plans have no enrollment periods. That means that your employees can buy into the plan immediately, or whenever the need arises.

CONS of Small Group Health Insurance

 
group health insurance for small business consGroup insurance can be more expensive for the employer. In the last few years, the average cost of group health insurance plans has gone up. While plans on the individual market have also gone up in price, the premiums and deductibles for group plans have gone up at an even higher rate. However, it is still possible to find affordable small group insurance.
group health insurance for small business consGroup health insurance is not individualized. The nature of group insurance plans is that all employees have only one option. While it is possible to offer more than one plan, the employer still has to select a single provider. This means that employees have less control of what kind of coverage they’re buying.

First Steps: How do I set up a group health insurance plan for small business?

Setting up a small group plan for your business isn’t as easy as snapping your fingers. But it doesn’t have to be rocket science either. The first step is creating an overview of your company and employee needs. You should begin by asking questions like:

  • How much can the company afford to pay for group insurance?
  • What kind of plan is best suited for my employees?
  • What benefits and plan options will help attract top talent?
  • What kind of group plans are available in my state?

Once you have a general view of your needs, your personal advisor can show you what’s available.

Request a Group Quote for Your Company


Group Health Insurance for Small Business: Frequently Asked Questions (F.A.Q.)

Q: What happens if I find a cheaper small group plan elsewhere?

A: As an employer, if a better group plan becomes available, it’s easy to make the switch. Your new plan will come with an open enrollment period so all your employees have the opportunity to enroll, choose options, and add dependents.

Anytime you switch group plans, there is a chance that costs could go up or down for your employees. Your advisor can keep you updated on new plans and rate changes.

Q: Can I just reimburse my employees for the cost of an individually-purchased plan?

A: It is possible to make tax-free benefit payments to your employees so that they can choose their own plan. This is actually the benefit of going with a small business HRA vs. traditional group insurance.

Q: How much does group health insurance cost?

A: According to data from the last few years and current pricing trends, group insurance rates will average about $400 – $500 per month.

Your specific plan’s rates will vary depending both the age of your employees and the zip code that your business is located in.

Q: Is my business required to provide health insurance?

A: Under the Affordable Care Act, not all businesses need to provide health insurance. In fact, no company is technically required to provide coverage. Instead, large companies who do not comply with the ACAs coverage stipulations simply pay a large penalty to the IRS.

Small businesses with 50 or fewer employees are exempt from this penalty. That means that these companies don’t need to offer any benefits at all. However, most of them do when they see the tax savings and bottom-line advantages that accompany employee health benefits.

group health insurance for small business key takeaways

KEY TAKEAWAY: Small Group Health Insurance for Small Business

Giving your employees access to a group health plan can make them happier, healthier, and more productive. It also provides employers with the opportunity to offer a tax-incentivized benefit as opposed to base wage increases.

Not all businesses are able to afford the cost of a group insurance plan. In addition, group plans can limit the amount of options your employees have when it comes to selecting coverage.

Fortunately, there are a number of great alternatives to business insurance, including HRAs and health sharing plans. We’ll have a look at these options next.

read-more-about-small-group-health-insurance-for-small-business

Read more about Small Group Health Insurance for your Small Business

If you’re interested in learning more about how to set up a group health insurance policy for your small business, check out Everything You Need to Know About Group Health Insurance for Small Businesses. This is a free comprehensive guide designed to simplify the group health insurance process.

Your personal benefits manager can help you sort through the many plans that are available. Give us a call anytime, or click here to schedule an appointment.

HRAs for Small Business – A Flexible, Customized Benefit Option for the Small Employer

Health reimbursement accounts (HRAs) allow small business owners to reimburse their employees for their health insurance and other out-of-pocket medical expenses. In most cases, this is a monthly allowance of tax-free money that you pay to your employee. 

HRAs can come in a lot of different forms. The most popular HRAs, however, are designed to compensate an employee for their individual coverage premiums.

In either case, the benefit is totally tax-free and the amount is determined by the employer.

How does an HRA health plan work?

HRAs are one of the easiest benefits to get setup. To begin, the employer determines who will be eligible for the benefit, as well as how much that benefit will be. Then, it’s up to the employee to enroll in a health insurance plan and apply for HRA benefits.

The details vary a bit depending on which type of HRA you’re offering. But in general, they’re very simple to understand, purchase, and administer.

How HRAs for small businesses work in 4 easy steps:

HRA pay benefitsThe employer decides how much they want to pay as a benefit.

There are no minimum contribution amounts for HRAs. This means that small businesses can offer an amount that makes financial sense.

proof of expensesThe employee submits proof of expenses.

While an HRAs are primarily used to pay monthly premiums, they can also cover the costs of some things not covered by insurance. After incurring an expense, the employee submits an invoice or receipt. An employee can also submit a description of benefits from their insurer if using their HRA to pay ongoing monthly premiums.

enroll in HRAsThe employee enrolls in a qualified health insurance plan.

HRAs require that the employee have their own health plan that meets minimum standards as defined in the Affordable Care Act. The employee is responsible for both choosing the plan and getting themselves enrolled

HRA reimbursementThe employer reimburses the employee via paycheck.

Monthly HRA benefits are added to the employee’s regular paycheck without including it as gross income. Other benefits are paid out as they are approved by the company, as is the case with out-of-pocket costs.

Why HRAs are Popular with Small Business

For many employers, a group HRA is a good way to ensure that your company’s benefit program isn’t going to take up too much time, money, or energy.

With HRAs, it is the employee who is responsible for choosing a plan and getting themselves enrolled, not the employer. It also means that the employee can choose whichever plan is best for them. This is unlike group plans which only give you one or two options to choose from, if any.  

The Different types of HRA: QSEHRAs vs. ICHRAs

HRAs come in all shapes and sizes. One of the first things that you’ll encounter when shopping for small business HRAs is the terms “QSEHRA” and “ICHRA”. In essence, these are the same thing: A low-cost health benefit that requires the employee to purchase their own insurance.

The differences between QSEHRAs and ICHRAs is mostly about company size. For example, QSEHRAs are only available to companies with 50 or fewer employees. ICHRAs as a slightly newer form that is available to companies of all sizes, and as such tend to be slightly more advanced in terms of administration.

If you decide that you’re interested in getting an HRA for your business, you can read more about the difference between QSEHRAs and ICHRAs.

The Pros & Cons of HRAs for Small Business

HRA benefit offers can come in all shapes and sizes. But for the most part, they come with the same basic benefits and drawbacks:

PROS of HRAs for Small Business

 
HRAs are tax-free prosHRAs are tax-free. HRAs are a formal health benefit, and as such they are completely free of payroll tax. HRA benefits can also be income-tax-free, provided that the employee has minimum essential coverage under ACA. Because the employer chooses the benefit amount, HRAs can save up to 50% in taxes compared to a wage increase of the same amount. 
HRAs are tax-free prosHRAs give employers more control. With HRAs, there is no minimum amount that the employer is required to contribute. This means that businesses can choose the amount of money that they want to spend on health benefits. This also means that it’s easier to create financial forecasts without having to worry about unexpected cost increases.
HRAs are tax-free prosHRAs have no minimum participation requirements. Even if your company only has a single employee, you can still offer a tax-free HRA. This includes providing coverage options for employees who are on family plans or enrolled in health sharing.  This is not how it works with traditional group insurance plans, which have stricter eligibility requirements. 
HRAs are tax-free prosHRAs are portable and personalized. With an HRA, your employees will have more complete control of their healthcare dollars. Employees are empowered to choose their own plan, providers, and service options all on their own. Aside from providing the benefit, the company is essentially removed from the health care process. In addition, employees can use their benefit to pay for things that might not be covered by a traditional group policy, such as vision, dental, and out-of-pocket costs.
HRAs are tax-free prosHRAs can work across state lines. Unlike group insurance plans, HRAs are available to employees out-of-state without any additional administrative hassle.

CONS of HRAs for Small Business

 
HRA consIndividual coverage is sometimes more expensive for the employee. Most HRAs require that the employee be enrolled in an individually purchased plan. While this does give the employee greater control of which plan to choose, they may pay more than they would per-month than they would with group coverage.

HRA cons

Employees will not be able to use an ACA subsidy alongside their individual HRA. HRAs can only be used to reimburse for insurance premiums that are not subsidized through the Marketplace. If your employee signs up for a plan and receives premium tax credits to lower their premium, they cannot participate in the HRA.

First Steps: How do I set up a small business HRA?

Setting up a company HRA is very easy. Here is the process in three easy steps:

small business HRADecide how much you will be reimbursing your employees. This can be a flat rate limited to premium costs, or it can include out-of-pocket costs like deductibles or dental expenses. With HRAs, the company makes the rules.

small business HRAAnnounce your company’s open enrollment period to your employees. They will have 60 days to sign up for a plan, and new employees can sign up when they are hired or after a pre-established waiting period.

small business HRAWork with an HRA administrator to handle all reimbursements. HRA administrators not only save a lot of time, but will also keep your plan in compliance and provide you with detailed monthly accounting. 

Once your HRA offer is up and running, it can be a hands-off benefit system with hardly any maintenance required.

Small Business HRA: Frequently Asked Questions (F.A.Q.)

Q: What happens if I find a cheaper small group plan elsewhere?

A: As an employer, if a better group plan becomes available, it’s easy to make the switch. Your new plan will come with an open enrollment period so all your employees have the opportunity to enroll, choose options, and add dependents.

Anytime you switch group plans, there is a chance that costs could go up or down for your employees. Your advisor can keep you updated on new plans and rate changes.

Q: Can I just reimburse my employees for the cost of an individually-purchased plan?

A: It is possible to make tax-free benefit payments to your employees so that they can choose their own plan. This is actually the benefit of going with a small business HRA vs. traditional group insurance.

Q: How much does group health insurance cost?

A: According to data from the last few years and current pricing trends, group insurance rates will average about $400 – $500 per month.

Your specific plan’s rates will vary depending both the age of your employees and the zip code that your business is located in.

Q: Is my business required to provide health insurance?

A: Under the Affordable Care Act, not all businesses need to provide health insurance. In fact, no company is technically required to provide coverage. Instead, large companies who do not comply with the ACAs coverage stipulations simply pay a large penalty to the IRS.

Small businesses with 50 or fewer employees are exempt from this penalty. That means that these companies don’t need to offer any benefits at all. However, most of them do when they see the tax savings and bottom-line advantages that accompany employee health benefits.

small business HRA key takeaway

KEY TAKEAWAY: HRAs for Small Businesses

Small business HRAs are the perfect option for the fast, young company that doesn’t have the time or resources to administrate a comprehensive group plan.

In addition, they provide the employees with the rare opportunity to choose how they want to manage their healthcare. This is opposed to the big, bloated group offerings that force everyone into a single plan.

Read more about Small Business HRAs, QSEHRAs, & ICHRAs

If you’re interested in learning more about HRAs for your small business, you should check out our in-depth guide. In Everything You Need to Know About Small Business HRAs, we go even further into how HRAs work and what kind of options are available.

Our personal benefits managers are well-versed in all of the options that are available. You can call us anytime to talk details, or click here to schedule an appointment.  

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Health Sharing Plans for Employees: A Health Insurance Alternative That’s Designed to Save Money

For more Americans than ever, Health care cost sharing is emerging as a viable, cost-saving health insurance alternative. Health share plans trade the bloated coverage of traditional insurance for a more dynamic form of health benefit. In doing so, they are able to free employees from the high premiums and tight constrictions of traditional insurance.

Health sharing can save you and your employees a lot of money. In fact, the monthly cost can be about half the cost of an unsubsidized plan. But that doesn’t mean that they are for everybody.

The Difference Between Health Sharing and Health Insurance

Healthcare cost sharing for employees is an alternative to health insurance, but it is not insurance. This allows health sharing to be more flexible, but it also lacks some of the basic protections of ACA health insurance.

For example, health sharing comes with no federal guarantee that your employees’ health costs will be covered. Health sharing organizations share member contributions with members who have medical cost needs, and there is no insurance company providing financial backing.

Health sharing plans also tend to have waiting periods on pre-existing conditions. If you have employees with pre-existing conditions or frequent medical needs, a small business group plan or an HRA might be a better option. Those come with guaranteed enrollment, so none of your employees can be denied coverage.

How to Qualify for Group Health Sharing:

Another difference between insurance and health sharing is what it takes to qualify. Traditionally, all health sharing plans were offered by Health Care Sharing Ministries (HCSM). These organizations require a statement of faith in the non-denominational Christian tradition.

Today, not all health sharing is faith based. Many plans will still require a statement of responsibility or an equivalent. Like the statement of faith, this is a signed document where the potential member can commit to a health-conscious lifestyle. Most discourage smoking and prohibit the use of any illegal substances.  

How do Health Sharing Plans work?

Even though health share plans are not technically insurance, many of them are designed to work in a very similar way. These plans have monthly payments (called contribution amounts), co-pays, and annual limits that work like deductibles.

For group plans, health sharing costs can be split between employer and employee in any way. They can also be paid directly from payroll, just like regular insurance.

How health sharing for employees works in 5 easy steps:

1. The employer chooses a medical cost sharing organization.

 There are a number of different health care sharing organizations that currently meet the government requirement. Mpowering Benefits and Sedera are perhaps the most popular group options. Each offers different levels of coverage. It’s up to you to choose one that has the right balance of pricing and coverage.  

2. The employee signs a statement of faith or an equivalent member agreement.

Medical cost sharing organizations ask members to agree to live by a set of moral, ethical, and health-conscious principles. For faith-based health share organizations, this is referred to as a statement of faith. 

3. The employer and the employee share the cost of the monthly member contribution.

Like with insurance or an HRA, the employer decides how much they want to contribute. The remainder is paid by the employee, usually directly from payroll. Unlike HRAs and group insurance, health share contributions are not tax deductible.

4. The employee provides the medical with their membership card, or submits bills for review after an expense is incurred.

Many health sharing plans work very similarly to health insurance, with a PPO network. Others allow you to see any provider, and then require that the member submit their medical receipts for approval. 

5. The health sharing organization determines how much of the cost will be shared.

After the receipts have been received, the health sharing organization decides how much of the cost will be shared. This takes into account any amount the member is responsible for (like a deductible) as well as whether or not the incurred costs are qualified according to the membership guidelines.

The Pros & Cons of Health Sharing Plans for Employees

Just like group insurance and HRAs, health sharing for small businesses can come in a lot of different forms. But it’s possible to boil it all down to a basic set of pros and cons:

PROS of Health Sharing Plans for Employees

 
Small Business Health Sharing prosHealth sharing is much cheaper than health insurance. On average, health sharing plans for business are between 30 and 50% more affordable than conventional insurance. If you are confident that health sharing plans can meet your needs, this is a great place to save big on monthly costs.
Small Business Health Sharing prosHealth sharing plans are portable. Even if your employee leaves the company, their health sharing membership will continue as long as they continue to pay their monthly share.
Small Business Health Sharing prosThey encourage a healthy lifestyle. Health sharing plans are perfect for the individual who is relatively healthy. But even more, these plans actively encourage a health-conscious lifestyle. It’s the perfect arrangement for someone who doesn’t intend to use their coverage all that much.

CONS of Health Sharing Plans for Employees

 
Small Business Health Sharing consThere are waiting periods for certain pre-existing conditions. With few exceptions, health sharing plans are far more restrictive when it comes to pre-existing conditions. These waiting periods can be between 12 and 26 months depending on the plan.
Small Business Health Sharing consHealth share contributions are not tax-deductible like insurance premiums. Health sharing organizations are completely separate from the government. This means that contributions are not tax-deductible the way that insurance premiums are. And yet, even without the tax savings health sharing plans are often cheaper than insurance.

First Steps: How do I set up a health sharing plan for my employees?

Make a list of your company’s standard medical needs. This means seeking out the answers to questions like:

Small Business HSA point 1How often do my employees seek medical care?

Small Business HSA point 2What kind of options would be popular?

Small Business HSA point 3Would my employees benefit more from lower premiums or more options?

Also determine the amount that the company can contribute towards health benefits. From there, your personal advisor can help you find a plan that checks all the boxes.

Group Health Sharing Plans: Frequently Asked Questions (F.A.Q.)

Q: Is health sharing available for small businesses?

A: It is now possible to get group health sharing plans and medical cost sharing plans for small businesses. While larger companies still must provide traditional ACA insurance, smaller companies can take advantage of this unique benefit offer.

Q: Can I still offer an HSA with a group health sharing plan?

A: Like health insurance, your group health insurance plan must be HSA-qualified. One such plan is MPowering Benefits. Pairing an HSA with a group health sharing plan gives your employees even more control of their healthcare options. The result is a happier, healthier workforce with more spending change in its pocket.

Q: Are there any maximums for health sharing plans?

A: Most health sharing plans do have a lifetime limit, but not all of them. Some may also have an annual limit.

Q: Can an employee be dropped for excessive medical needs?

A: With group healthshare plans, members cannot be dropped due to their medical needs. The amount of medical expenses your employee may have will also not affect their monthly contribution amount.

Small Business HealthShare key takeawaysKEY TAKEAWAY: Group Health Sharing Plans for Employees

Health sharing plans can be one of the easiest ways to save money on employee benefits. It’s not as comprehensive as regular insurance, and waiting periods for pre-existing conditions make it less ideal for employees with more health needs.

Even so, it’s hard to find a better monthly deal on health benefits than with a health sharing plan.

Read more about Health Sharing Plans for Small Business

Read more about Health Sharing Plans for Small Business

Your personal benefits manager can help you find a health sharing program that lines up with your needs. Once you find a plan that you like, getting enrolled is easy.

You can read more about health sharing for small businesses by checking out our comprehensive guide, Everything You Need to Know About Health Sharing Plans for Small Business.”

Direct Primary Care for Small Businesses – Improving Care Access at No Cost to Employees

DPC is a simple membership-based health plan designed just for routine primary care health services. It provides employees with unlimited access to primary care doctors for routine and preventive health services and the maintenance of chronic conditions… at zero out-of-pocket costs to workers.  

Employers also save on direct health care expenditures. Better access to preventative care and maintenance of expensive chronic conditions like diabetes, heart disease, and hypertension also help reduce health care utilization costs while reducing absenteeism and improving productivity.

How does a direct primary care plan work?

Employers select a medical provider, and pay a flat monthly enrollment fee for each employee and family member in the plan. In return, employees and covered family members receive unlimited access to their primary care physician, who provides routine checkups, physicals, vaccinations, monitors and manages chronic conditions, and provides referrals to specialists as needed.

Think of it as similar to a gym membership: Once the monthly membership fee is paid, there are no further costs for either the company or employee for covered services. Employees can see their primary care doctors as often as they need to.

Direct primary care is not health insurance. Instead, it removes the expensive health insurance company from the equation. Doctors and clinics who work under the DPC model don’t need to maintain large billing departments to handle insurance payments. Their administrative overhead is massively reduced. And as a result, so are overall costs.

Direct primary care plans don’t cover everything. They are strictly for routine care, check-ups and physicals, preventive care, immunizations, and monitoring routine conditions to prevent major problems later.

Note: Not all DPC plans provide treatment for chronic conditions. Check with your plan provider for details – especially if you believe you have employees or family members who have one or more such conditions.

To protect against the unexpected costs of medical emergencies, acute conditions, and health events requiring more advanced care, employers and workers normally combine DPC plans with a traditional health insurance policy or a health sharing plan as described above.

However, because direct primary care covers the basic routine and preventative services, employers can choose lower-cost high-deductible health insurance plans (HDHPs) or a low-cost non-insurance alternative such as a health sharing plan. This generates significant savings compared to traditional major medical insurance approaches for employers and workers alike.

Why DPCs are Popular with Small Businesses

Even with insurance, some patients and families avoid going to the doctor because of costs. Traditional insurance approaches still leave families with copays, co-insurance, and deductibles, depending on the situation.

As a result, families may avoid going to their doctor for needed care and preventative services. But over time, the lack of care and failure to diagnose and manage health problems early on eventually leads to massive direct and indirect health expenditures later on.

Thousands of small businesses are discovering that by offering a DPC option to employees at no cost to them, their workers are less likely to avoid seeing their doctors, getting the tests they need, and getting help in monitoring and managing chronic conditions… before they have to go to the hospital.

Workers also find that they have better access to their primary care physicians and can spend more face time with their doctors. This is because the reduced overhead means doctors can reduce their patient load, and spend more time with each individual patient who needs it.

Employees receive better care – with no deductibles, copays, or coinsurance charges. Going to the doctor is free for them. 

 Companies enjoy significant cost savings. The $80-$120 per month they spend per employee or family member in DPC benefits more than pays for itself as employees use high-deductible health plans + HSAs, health sharing plans, and health reimbursement arrangements rather than more expensive traditional low-deductible insurance models.

Over time, improved access to care also pays off in reduced health care utilization, reduced absenteeism, improved retention, and better productivity. 

The Pros and Cons of DPC for Small Businesses

DPC plans come with many variations. But they generally all offer the same advantages and drawbacks for small business employers: 

PROS of DPC for Small Businesses

 

Small Business Health Sharing pros

Employees enjoy better access to primary care physicians at no out-of-pocket costs to them. 

Small Business Health Sharing pros

Better morale and retention, as employees feel better cared for

Small Business Health Sharing pros

Improved management of health conditions significantly reduces health care utilization costs, time off work,  presenteeism. 

Small Business Health Sharing pros

Companies enjoy direct cost savings as employees can select a high-deductible health plan (HDHP) plus a health savings account, or a low-cost health sharing alternative, rather than opting for a high-cost traditional major medical insurance policy with high premiums. 

 

CONS  of DPC for Small Businesses

 

Small Business Health Sharing cons

DPCs aren’t meant to stand alone. They should be combined with a high-deducitble health insurance policy, a low-cost health sharing plan alternative to traditional health insurance, or in some cases, a health reimbursement arrangement that helps employees buy their own private insurance coverage. 

Small Business Health Sharing cons

DPC expenditures don’t count toward insurance deductibles, even if the worker pays the DPC enrollment/subscription fee themselves.

Small Business Health Sharing cons

Not every DPC provides treatment for chronic conditions.

Small Business Health Sharing cons

DPC plans don’t include prescription drugs. But workers or employers can provide a stand-alone drug plan, health insurance, or health sharing plans that provide assistance with prescription drug costs.

First Steps: How Do I Set Up Direct Primary Care for my Employees?

Setting up a direct primary care plan as an employee benefit is very easy: 

  1. Decide whether you will offer family members access to DPC benefits (most do), and what specific classes of employees will qualify for the benefit.

     

  2. Work with your HSA for America representative to select a plan with providers convenient to your area, or the areas where your employees live. 

3. Prepare a roster of employees who will be eligible for the benefit. 

4. Arrange training or a briefing on how direct primary care works and how it benefits workers and their families.

5. Have employees enroll online

6. Pay membership fees to DPC plans directly or via payroll deduction

7.Onboard new employees and family members as necessary. 

Direct Primary Care – Frequently Asked Questions

Q: Is direct primary care a form of insurance?

A: No. DPC plans are a lower-cost and more efficient alternative to traditional insurance.  Employers or patients just pay a monthly fee for patients to access primary care as needed. Meanwhile, doctors drop the crazy expensive insurance companies so they can focus on what’s most important: Providing care to patients.

Q: Is DPC the same as “concierge medicine?”

A: No. In concierge medicine, patients pay a monthly or annual retainer fee to their doctor for more access. But this is in addition to paying a premium for medical insurance. Since the doctor still takes medical insurance, there is no savings from not having to run an extensive insurance billing bureaucracy. The patient may enjoy more access to the doctor, since the doctor does not need to take on the same large patient load as they do without a retainer. But it doesn’t improve efficiency or generate cost savings for the patient.

In direct primary care, the care provider drops the bureaucratic and inefficient insurance red tape entirely. This allows for significantly reduced back office operations, gives doctors more time, and saves money!

Meanwhile, employees and their families enjoy a much better healthcare experience.

Q: What services do DPC doctors commonly provide?

A: DPC doctors can usually handle routine preventative care and health maintenance tasks and procedures. Examples include:

 

  • Treating flu, strep, and other minor infections
  • Proscribing and renewing medications
  • Monitoring chronic conditions like diabetes, heart disease, and thyroid disorders
  • Annual checkups
  • Breast exams and pap smears
  • Immunizations
  • Prostate exams
  • Cholesterol monitoring
  • Ordering labs and going over results with patients
  • Weight loss advice
  • Minor in-office procedures such as mole removal or stitches
  • Assess sprains and other minor injuries
  • Doctors’ notes and work excusals
  • Managing specialist care and referrals

Q: What’s not included in DPC plans?

A: Normally, external lab procedures and prescription drugs are not included in DPC plans. However, most DPC organizations have negotiated highly discounted cash pricing with local labs and pharmacies.

For some common medications, DPC clinics dispense them directly from their offices at wholesale prices.

Q: Do DPC patients need insurance?

A: Direct primary care plans only cover basic routine and preventative care and monitoring of chronic health conditions. These costs are generally quite predictable. They don’t cover trips to the ER, hospitalizations, prescription drugs, cancer treatment, heart attack treatment, stroke, or other emergencies or acute health conditions.

For that reason, patients should combine DPC plans with additional protection, which could be in the form of a high-deductible health plan and health savings account combination, or it could be in the form of a group medical plan, or a health insurance plan they purchase privately – perhaps with the assistance of a company health reimbursement arrangement.

DPC plans are not designed to function alone, as they still leave patients with significant exposure to financial risk from high medical costs, unless additional protection is layered on top of the DPC plan.

Note that when properly implemented, combination DPC and health sharing or DPC and HDHP/HSA plans can provide dramatic savings for employers, while still providing great protection against unexpected high healthcare costs.

Key Takeaways – Direct Primary Care for Small Businesses

Direct primary care is a great fit for small businesses that want to reduce their healthcare-related expenditures while not sacrificing the medical care that their employees and their families deserve.

These plans provide a much more positive healthcare experience than the traditional insurance-based model.

DPC plans should be offered in combination with a health sharing plan or high-deductible health plan (HDHP) and health savings account combination.

Employers need to work with health benefit vendors to educate patients on how to use their direct primary care benefit, and how to combine it with other forms of protection. 

How to Choose the Best Health Benefit for your Small Business

Choosing a health insurance option for your employees can seem like a daunting task. Before you begin, ask yourself the following questions:

  • What options is your company eligible to offer?
  • How much are you willing to spend on health benefits?
  • How much time do you have to manage and administer benefits?
  • Which benefit option would be of highest value to your employees?

Small Business Health Benefit Step 1STEP ONE: Review Your Budget

Many small businesses forgo health benefits because of the high price. But there are some options like HRAs and health sharing that fit even the smallest company’s budget.

The first thing you need to determine is how much you are willing to contribute for health benefits.

Small Business Health Benefit Step 2STEP TWO: Consider your Employees’ Annual Income

The amount of money your employees are currently making may affect the affordability of their healthcare. For example, some HRAs are not compatible with the ACA subsidy, which could force your employees to have to choose one or the other.

Knowing how much your team is currently making will help your advisor find the right option for everyone.

Small Business Health Benefit Step 3STEP THREE: Consider your Employees’ Coverage Needs

It’s always a good idea to talk to your employees about their health needs before purchasing a plan. Try to get a feel for how often they use their coverage, and whether or not the benefit you’re thinking about would help them pay for their healthcare.

Small Business Health Benefit Step 4STEP FOUR: Talk to Your Personal Advisor about Small Group Insurance

Unlike traditional insurance, employee health benefits do not need to be “one-size-fits-all”. With HRAs, HSAs, and health sharing, it’s possible to create a flexible benefits package that encourages the employee to take ownership of their health decisions.

In addition, it’s possible to build different combinations of these benefits for added convenience. For example, pairing a health sharing plan with an employee HSA is a great way to offer balanced coverage without spending too much.

Health Insurance for Small BusinessLearn More About Your Small Business Healthcare Options

Since 2004, we have been committed to helping small companies secure the right health benefits for their team. In doing so, we’ve helped create innovative financial strategies that help these companies grow and thrive.

Your personal benefits manager is an expert guide that can help you navigate the costs and coverage options of small business insurance.

Give us a call to get on the calendar for a strategy session, or click here to make an appointment.

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