When companies first set up a health reimbursement arrangement (HRA), they often wonder if there is a specific (or required) time frame for reimbursing employees’ health expenses. Likewise, employees want to know how long they have to get their health expenses paid.
As a rule of thumb, health insurance reimbursement deadlines are defined by the HRA plan documents.
Rather than offer a traditional group health insurance policy, an increasing number of small businesses want to know whether they can reimburse their employees' individual health insurance. They also want to know whether such an arrangement is taxable.
There are many advantages to running your own business: being your own boss, setting and achieving lifelong goals, doing what you love. This is probably why more than 27 million Americans have decided to become entrepreneurs. But as exciting as it can be to start your own small business, you’ll also face many challenges.
If you run a small business with one employee, you might think you can’t afford health insurance. Happily, this doesn’t have to be the case. Whether you plan to stay solo or you’d like to grow, you have several options for small business health insurance.
A health reimbursement arrangement (HRA) is a type of tax-free personalized health benefit. HRAs are particularly popular among small businesses, as they are a great way for businesses to provide their workers with health benefits. These businesses often find the traditional group benefits method is too expensive, too complex, and too one-size-fits-all. With an HRA, employers reimburse employees tax-free for eligible health expenses up to a certain amount.
For an HRA to run smoothly, employees must be able to submit claims and get them processed in a timely manner. On the administrator side, IRS rules and plan documents require businesses to follow appropriate timelines for processing claims and issuing reimbursements. In the context of an HRA, a “claim” is a request for reimbursement.
Here is a step-by-step overview of HRA claim rules.
Whether a business is large or small, business owners know that the best way to hire and keep top talent is by offering the benefits employees want most. Research shows that today’s workers place a high value on company-provided health benefits: 82 percent say health insurance is “very” or “extremely important” when choosing to stay with their current company versus search for a new job.
Unfortunately, it’s harder than ever for small businesses to offer traditional group health insurance. For one, it’s too expensive. Rising costs and shrinking offer rates mean that few small companies can afford to offer health benefits. When small businesses can’t afford a group plan, they must choose between ceasing benefits altogether or offering an alternative—like a taxable wage increase or tax-free personalized benefits.
For decades, traditional group health insurance was the standard health care coverage option for businesses of all sizes. In recent years, however, a growing number of small businesses have struggled with the costs, administrative burden, and inflexibility associated with big group plans. In fact, just 29 percent of businesses with fewer than 50 employees offered group health insurance in 2016.
There are several reasons why traditional group health insurance isn’t always the best choice for small businesses with fewer than 50 employees. In this post, we cover the top five reasons group health plans don’t always work for small businesses—as well as an affordable and flexible alternative to group health plans.
When Congress created the qualified small employer health reimbursement arrangement (QSEHRA), many envisioned it as a vehicle for small businesses to better control their benefits budget.
Because small businesses using a QSEHRA could choose the dollar amount they would contribute to employees each month, they would no longer be at the mercy of unpredictable premium increases and other administration costs.
In the newest PeopleKeep release, The QSEHRA: Annual Report 2018, data from businesses that used the QSEHRA show the new benefit fulfilled its purpose.
In this post, we’ll use excerpts from the Annual Report to explain how the QSEHRA compared to traditional group health insurance in 2017. You can download the full report for more insights here.
After the 21st Century Cures Act passed in 2016, small businesses nationwide adopted the qualified small employer health reimbursement arrangement (QSEHRA) as a vehicle for offering personalized health benefits.
Though the QSEHRA is available to all businesses with fewer than 50 employees, data from PeopleKeep—available for free in The QSEHRA: Annual Report 2018—identifies clear trends across the country in terms of which businesses adopted the QSEHRA, the size of employee allowances, and how employees used the benefit.
With the QSEHRA, businesses offer employees a monthly allowance. Employees then choose and pay for health care, including insurance policies. Finally, the business reimburses them up to their allowance amount.
Hundreds of small businesses offered a QSEHRA last year, according to The QSEHRA: Annual Report 2018, a study conducted by PeopleKeep and released earlier this month.
The following is an excerpt from the Annual Report, revealing the top five takeaways from the first year of QSEHRA use. To learn more, download the full report here for free.
The rising costs of health care aren’t just a problem for individuals—they’ve also impacted businesses that make health benefits a priority for their employees.
Small businesses have been particularly vulnerable. Over the last 15 years, the cost to cover one employee under group health insurance rose nearly 200 percent—from $2,196 to $6,435.
These unsustainable costs, coupled with the hassle and one-size-fits-all nature of traditional group benefits, have caused many small businesses to look for alternatives. And while health care costs continue to grow, the good news is that small group options have as well.
In this post, we’ll review five of the most popular health benefits solutions for small groups in 2018:
Qualified small employer health reimbursement arrangements (QSEHRAs)
Traditional group health insurance
Health insurance purchasing co-ops
We’ll go over how they work, what advantages they offer, and what disadvantages a business might have to contend with should it choose these options.
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