California may offer more health plans than other states, but the outlook for those who buy on the Market and small businesses is not great. This year, premium costs are expected to increase at a faster rate than in most states and due to the elimination of individual mandates for small group plans, costs could rise by 2-4% more than normal.
The fact that small businesses are the ones that will be affected by these trends is even more concerning. Companies with less than 20 employees make up 88% of California’s companies and 20% of its workforce.
De facto, it is disappointing that despite the importance of small businesses to the financial system of the state, it’s so difficult to find high-quality healthcare for these companies. It’s not surprising, either, as expensive group plans are simply not financially feasible for small businesses and those just starting out. Premiums are also increasing year after year, which makes it expensive and unpredictable for those with tight budgets.
In the 2016 Employer Health Advantages Survey by Kaiser Household Basis, the Kaiser Family Basis reported the average employer-sponsored medical insurance premium for a single coverage was $6,435 and for a household it was $18,142 per year. YIKES.
How can small businesses compete with large firms in terms of offering benefits packages? Try a QSEHRA as an alternative to costly group plans and leaving the burden on your employees.
A QSEHRA allows small businesses to enjoy the same benefits as larger companies. This is due to the bipartisan law called the 21st Century Cures Act, which was passed relatively recently. Before this law was passed, employers could only offer HRAs if they were a part of ACA-compliant group health plans. If they provided reimbursements or money outside of these group health plans, the company was penalized.
QSEHRA can be a great way to provide benefits to your employees. It’s not widely publicized, so many people don’t know about it.
California is a prime market for reimbursement.
QSEHRA is a great option for Californian small business owners and their employees.
- It is sensible. QSEHRAs use tax benefits to help small businesses. QSEHRA contributions are free of tax.
- Increases retention. Wondering what is the most important issue for millennials or job seekers considering a new job? It’s medical health insurance benefits. Without a competitive benefits package, the best and brightest might choose to work elsewhere. Another benefit for employees is the ability to select their own plan, as opposed to being bundled into a group plan that may not cover their doctors, prescriptions or well-being needs.
- Saves you time. Selecting and managing a group plan requires a lot of time and effort. You’ve got better things to do as a startup. The right QSEHRA management platform can save you time in the future. Take Command Well being’s QSEHRA administration platform will help you onboard staff, create plan paperwork, stay compliant and make tax time easier.
- Predictable prices. You can save money. You can control the amount you contribute to your QSEHRA, unlike a group plan that may increase in price year over year. You decide the terms and your budget. What happens to any leftover money if they’re not used? The money stays in the business and does not roll over. You are not responsible for funding multiple accounts. Instead, you only pay when a worker submits a reimbursement request. FYI, for 2020, the maximum allowance for a worker with family expenses is $10,600 and the most annual individual amount is $5,250.
- This QSEHRA is flexible. You can design it to meet your needs. You need to reimburse premiums only? Nice. You can add certified medical bills if you want. Even higher. Want to scale contributions according to age, status, or family size? This is possible (as long as you are truthful! ).
The Particular person Protection HRA, which is a “cousin”, offers the benefits of QSEHRA for a larger footprint of businesses, and helps employers in California assist their employees meet the new California individual mandate.
What are your options if you qualify for a tax credit?
If you have fewer than fifty workers and more than two, but less than 50, employees and do not offer a group health plan at the moment, you can take part in the small business HRA program. If your company is larger than this, you may want to consider an ICHRA instead.
This system is open to all full-time employees, defined as those who work at least 30 hours per week and for a minimum of 120 consecutive days.
You can also exclude the following people from your QSEHRA plan if you wish:
- Employees who have not completed 90 days of service
- Workers under the age of 25
- Seasonal and half-time staff
- Staff who are union members (except for those who meet the criteria set out in their collective agreement)
- Non-resident aliens without income from American sources
The next steps
Take Command Well being’s QSEHRA experts have created a data-driven system for small businesses in all 50 US states. This platform can be tailored to meet your needs for QSEHRA management. We take care of the monthly reporting, tax details, employee on-boarding, industry benchmarking and compliance issues. We do the heavy lifting, so that you can get back to what you do best.
Chat with our experts on the website! Call us.
Take a look at the new QSEHRA information, a first in its kind!
I started this blog because I’m passionate about ideas (big and small) that can assist fix our healthcare system. I worked on initiatives for Kaiser Permanente, and Parkland Health & Hospital System. I know the system inside and out. It’s vital for clients to stay up-to-date with the changing medical insurance laws and market shifts. I’m also Take Command Wellbeing’s Content Material Editor and a busy mom. Learn more about me, and join me on our
About us page Thanks!
Take Command, a Dallas-based startup with a mission to improve the healthcare system by starting with medical insurance. We are HRA geeks who help employers reimburse their staff for individual medical insurance using HRAs.
