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As a business owner, it is in your best interest to offer your employees a comprehensive benefits package, but how do you know what works and what doesn’t? Health insurance is a good place to start but there are so many options to choose from.
Offering the “right” health insurance plan is one of the most important decisions you can make as a business owner. Keeping employees happy and healthy will benefit you in the long run. But making sense of the complex health care system has become increasingly difficult for employers. We are here to help you understand and then, untangle, your group health insurance options.
Simply put, group health insurance is a health insurance plan you extend to your business’s staff and, perhaps, their dependents. With a group health insurance program, you pay either part or all of the cost of the monthly premiums for your employees, from which you typically gain certain tax benefits.
There is no right or wrong answer when it comes to health insurance planning for your business because there are many variables to consider. We can help you determine the plan that is right for you and then help you develop a strategy that is best for both your company and employees.
A health reimbursement arrangement (HRA), also commonly (and mistakenly) called a health reimbursement account, is an employer funded health benefit. Confirmed in 2002, the IRS approved the use of HRAs to reimburse employees for their qualified medical expenses and health insurance premiums.
HRAs are not health insurance. Rather, they provide an allowance of dollars on a tax-free basis for employees to purchase health care services. The arrangement is especially great for smaller businesses who may be unable to afford group health insurance or extensive coverage.
Employees benefit from HRAs as out-of-pocket expenses such as deductibles, co-pays, and coinsurance can be paid for using HRA dollars provided by their employer. If the same dollars are instead used to increase an employee’s pay, taxes would eat away 20% to 40% of their purchasing power.
Employers benefit by attracting and retaining talent. Financially, HRA contributions may be deducted as a business expense, reducing an employer’s FICA and FUTA taxes. HRAs are also highly flexible, allowing employers to mold the plan to meet their specific organization’s benefits needs. Any unused dollars may be retained by the employer.
Health reimbursement arrangements are relatively simple. There can be a few variations between plans, but in general, each follows the same configuration:
HRAs do not need to be pre-funded. Instead, employers can reimburse employees as they submit the proper documentation. So long as the expenses are qualified (see the whole list here), both parties will benefit.
There are specific steps required before you take advantage of an HRA. Contact our office to review your options and select a plan that bolster your benefits and your bottom line.
Each client is unique, with its own set of needs and requirements. As a result, we do not provide cookie-cutter solutions. We treat every client differently, with the understanding that every employer has different needs!
Instead of anticipating your needs, we listen and learn what you value and dislike in your current group health and employee benefits. From there, we ask questions and develop a strategy to help you meet your goals. We then set up regular meetings to review the strategies we’ve implemented together to ensure that you are moving closer to meeting your goals.
Many employers use their employee benefits packages to attract and retain valuable employees to keep their business thriving. At the very least, employee benefits can consist of health, dental, disability, and life insurance.
We can assist you in developing a combination of carriers and products that meet your needs and expectations. We will work with you to develop strategies to ensure you are in line with your competition.
We would like the opportunity to earn your business. To schedule an appointment, please fill out the Contact Us form. We will contact you to schedule an appointment.
Our firm is staffed by proven insurance professionals committed to providing our clients with highly personalized service.
