More and more, small businesses are ditching the cumbersome, pricy group plan and opting for reimbursing their employees tax-free with a QSEHRA. While this new, better way to offer benefits is gaining traction with small businesses across the country, we often hear from customers that they wish they’d known about QSEHRA before they'd offered a group plan to their staff and now they feel stuck. The good news is that in most cases, you can cancel at any time and in all cases, you can sign up for a QSEHRA any day of the year.
Here are the steps to take in order to cancel your group health insurance plan and sign up for a QSEHRA.
How to switch from a group plan to a QSEHRA
1. Dig into your contract
Most group health insurance plans are unilateral contracts, meaning that you can cancel a group plan at any time during the year. Some carriers request 30 days' notice, but that's not always the case. Occasionally, there are financial penalties for canceling early.
The first place to look is in the fine print of your contract, but it's always smart to engage your insurance broker or even call a customer service representative at your insurance provider to make sure you understand the necessary steps to cancel. Some will require an old-fashioned written letter or fax and many won't accept a simple email as a sufficient way to cancel, meaning you could be on the hook for next month's premium.
2. Sign up for a QSEHRA
First, choose a reputable QSEHRA administration software provider (like us!) to administer your small business HRA.
And now for the fun part! Design your QSEHRA with our QSEHRA plan designer for a plan custom tailored to your company's needs. Choose a monthly reimbursement amount or opt to max out the limit, choose whether or not to reimburse for premiums only or premiums and qualified medical expenses, and choose whether to structure reimbursement the same for all employees or vary by family size.
After that, our QSEHRA administration software takes care of the legal documents, receipt tracking, compliance assurance, tax reporting, employee on-boarding and support - all without a setup fee or annual contract.
This might sound really complicated but our QSEHRA plan design tool does the heavy lifting for you and most folks are up and running in two or three minutes.
3. Keep your employees in the loop
Change can be hard. That's why it's important to inform your staff of upcoming changes that will affect their benefits as early as possible.
Change of any kind can be stressful, especially for long-time employees who have enjoyed their traditional group plan for years. Explaining QSEHRA and its benefits will help smooth the transition. Equip your employees with as much information as possible as early as possible to understand this new model of benefits and how these changes will affect them. Most likely, they haven't heard of it before but avoiding any surprises will help them welcome their new benefit.
It's also important to remind them that once the group plan is cancelled, they'll have a 60 day Special Enrollment Period to choose a new insurance plan on the individual market. If they wait any longer, they'll have to wait until open enrollment to choose another plan, and will be left with a scarcer selection of options that meet the MEC requirement in the meantime (like faith-based plans or short term plans, which can be initiated outside of open enrollment but have to be paired with a MEC plan to be able to be reimbursed by a QSEHRA).
The good news is that they can choose whatever plan works best for their families, their preferred doctors, and their prescriptions! (And if they need help finding that plan, our team is at the ready to assist!)
Ready to give it a try?
Dropping your group plan has many benefits, from easing the administrative burden to preventing the inevitable price creep for group plans. It will see you time, money, and headaches.
Check out our QSHERA Guide for information on requirements, rules, regulations, setup and FAQs. Our team of QSEHRA experts are ready to chat with you to answer any questions you have have along the way.
Learn more about our small business platform or schedule a call with one of our small business HRA experts today.
I wrote this blog because I care about ideas (big and little) that can help fix our healthcare system. I used to work on projects for Kaiser Permanente and the Parkland Health & Hospital System so I've seen the system inside and out. It's so important that consumers keep up with industry shifts and changing health insurance regulations. I'm also Take Command Health's Content Editor and a busy mom. Learn more about me and connect with me on our about us page. Thanks!