ORLANDO, Fla.—According to Real Time Health Quotes, 4 million people in Florida are without health insurance (over 20% of the population).
According to the same study, 94% of large businesses supply health insurance to their employees, whereas small business health insurance in Florida is only offered by 38% of small businesses. However, offering group coverage in Florida as a small business owner can have significant benefits. If you are a small business owner with 25 full-time employees or less, and pay an average salary less than or equal to $50,000 a year, you might be eligible for a tax credit. This tax credit was created under the Patient Protection and Affordable Care Act (PPACA) in order to give small businesses and tax-exempt organizations a break on the cost of group health insurance for their employees. In some states, the tax credit only applies to Qualifying Health Plans (QHPs) bought through government exchanges and other restrictions may apply.
Small businesses with fewer than 10 full-time employees that pay average annual wages of $25,000 or less may qualify for the full credit. The amount of the credit is reduced for companies with more full-time workers and higher wages, until it is phased out entirely for those with 25 or more full-time workers and average annual wages over $50,000.
More and more small business owners talk about the high cost and other challenges of traditional small group health insurance. There are small businesses, and then there are very small businesses. Sometimes it may be harder for businesses with only a few people to supply coverage to employees, due to factors such as having small revenues than larger businesses. Fortunately, the health benefits options for small businesses are growing.
What are your options in 2019?
The qualified small employer health reimbursement arrangement (QSEHRA)
With the QSEHRA, businesses with fewer than 50 employees offer employees a monthly allowance of tax-free money. Employees then choose and pay for health care, potentially including personal insurance policies, and the business reimburses them up to their allowance amount. This allows businesses to keep control over their budget while offering a meaningful benefit to their employees.
Traditional group health insurance
Small businesses offering group health insurance pay a fixed premium for the policy, though they may pass on a portion of the premium cost to employees. Employees are responsible for copays and deductibles associated with the services they seek.
Association health plans
AHPs allow small businesses to band together within industries, professions, or geographic regions to either purchase large-group coverage or self-insure.
With a group-integrated HRA, the business offers employees a monthly allowance of tax-free money in addition to the group policy. Employees then choose and pay for health care and the business reimburses them up to their allowance amount.
Self-funded health insurance
With a self-insurance arrangement, the business assumes the financial risk for providing health care benefits to employees. This means that rather than paying a fixed premium to an insurer, the business pays for each employee out-of-pocket claim as it arises.
HRAs on the horizon
New October 2018 regulations from the Departments of the Treasury, Labor, and Health and Human Services would create two new HRAs: the individual-integrated HRA and the excepted benefit HRA.The excepted benefit HRA would allow businesses with a group health insurance policy to reimburse employees for other medical expenses, such as a dental visit or short-term health insurance premium. The HRA would be capped at $1,800 per year per employee, and couldn't be offered alongside any other HRA.
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