Employer Benefits
Agency owner, Pete Wiswell, works with small business owners to help them determine the best course of action for providing health coverage for their employees. See below for more details regarding ICHRA versus Traditional Group Coverage. Be sure to review the basic requirements for offering a group plan. If you're confident you can meet those requirements and you'd like to obtain a quote, click the button below to get started!
ICHRA
What is an ICHRA (Individual Coverage Health Reimbursement Arrangement)?
An ICHRA (pronounced "ick-rah") is an employer-sponsored health coverage plan that allows employers to reimburse employees for the cost of their individual health insurance policies on a tax-free basis, in conjunction with Section 125 plans. This arrangement offers greater flexibility compared to traditional group policies regarding employer contributions.
With an ICHRA, employees can choose a health insurance carrier and plan tier (Bronze, Silver, Gold) that best meets their family's needs. In contrast, traditional group plans typically limit employees to options selected by the employer.
In Colorado, the Individual Exchange provides strong options that can lead to cost savings for both small and large businesses. It's important to note that all plans offered through an ICHRA are HMO network plans. If you're looking for PPO options, an ICHRA may not be the right choice.
To review costs please use the Connect for Health cost tool provided by the state of Colorado. When offering a group ICHRA, members are not eligible to receive tax credits from the state, so look at the full cost of the plans and the employer will give the contribution.
https://planfinder.connectforhealthco.com/home
For more detailed information, visit https://www.healthcare.gov/small-businesses/learn-more/individual-coverage-hra/ regarding ICHRAs.
If you have any questions about ICHRAs, please don't hesitate to reach out!
Breakdown on Cost:
- Platform Fee: $15 - $30/month per employee
- Broker Fee: $15 - $25/month per employee
- Employer Contribution: The employer chooses how much they're willing to contribute towards an employee's plan. It is fairly common for an employer to reimburse an amount that's equivalent to the lowest cost silver plan, but we would discuss all your options. In addition, the employer can decide whether to reimburse the employee only or contribute towards the employee's dependents.
Additional Benefits (Optional):
- Group Dental - Requires a Minimum of two employees to start
- Group Vision - Requires a Minimum of two employees to start
- Accidental Plan -
- Single Person: $7,500 coverage for $39.75/month
- Family: $7,500 coverage for $59.75/month (Pricing may vary based on group size)
Payment Process:
Payments to the carrier will be processed through the platform, with the employer covering the full amount up front. The employee's portion will be reimbursed to the employer via payroll. Once health plans are selected, it’s essential to notify the payroll team of each plan's cost to ensure proper deductions from employee paychecks.
Traditional Group Coverage
Traditional group coverage allows employers to choose a carrier and offer various plans and tiers to their employees. While these plans often come with more regulations compared to an Individual Coverage Health Reimbursement Arrangement (ICHRA), they typically provide access to larger networks, such as Preferred Provider Organizations (PPOs). However, this broader network usually carries a higher cost.
Generally, employers can offer three different plans, though the number may vary based on the size of the group and the chosen carrier. Additionally, the enrollment process is typically simpler than that of ICHRA plans.
If you have any questions regarding traditional group coverage, please feel free to reach out.
Requirements to Offer a Group Plan:
- Employer must have at least one full-time, unrelated W2 employee that would enroll in the plan.
- Employer must offer benefit to all full-time employees.
- Employee must be employed for a minimum of 2 quarters (6 months) prior to enrolling in coverage.
- Employers must pay at least 50% of the employee's premium cost. (Employers are not required to pay towards spouse or dependent premiums.)
- Business must be domiciled in Colorado.
Cost Breakdown:
Contribution: The employer determines the amount they wish to contribute towards employees' plans. Here are some examples:
- Minimum of 50% towards Employee Only
- 100% of Employee Coverage
- 100% of Employee Coverage; plus a percentage for Dependents
Optional Benefits:
You may consider adding extra benefits, although they are not required:
- Group Dental: Available as a bundle from the health carrier or through a separate carrier, such as Delta Dental.
- Group Vision: Similar to dental, this can be bundled or provided through another carrier.
- Accidental Coverage: (Prices may vary based on group size.)
- Individual: $7,500 coverage for $39.75/month
- Family: $7,500 coverage for $59.75/month
Payment Process:
Payments to the carrier will be handled directly by the employer, who will cover the full premium amount. The employer will be reimbursed for the employee's portion through payroll deductions. Once health plans are selected, it’s essential to inform the payroll team about the costs associated with each plan to ensure accurate deductions from employee paychecks.
