Boost employee morale and retention rates by offering tax-free reimbursement for customizable health insurance plans - in the form of a small business HRA! Setting up the HRA can be done with a few simple steps, thanks to something called a QSEHRA, a provision of the 21st Century Cures Act. Wondering where to start?
- Pick a start date. The first step is pretty easy-establish a start date! If your company currently does not offer a group plan, you can start your plan ASAP. However, if you already have a plan in place you will need to cancel it before you begin your HRA.
- Set a cancellation date for your group policy. This step is only for business owners currently offering group health insurance. You will need to cancel the group plan coverage before the start date of the new HRA. In order to avoid any gaps in coverage, ensure the group plan ends one day before the HRA begins.
- Confirm who will be eligible. You are required to offer the HRA to all full-time employees. You have the option to offer the HRA to part-time employees as well, but it is not required.
- Determine a budget and set allowances. Your next step is to determine how much you’ll give employees to reimburse them for premium costs and medical expenses. You can set a monthly allowance (such as $200/month) or offer maximum coverage for your employees $4,950/individual or $10,000/family. There is no minimum contribution amount to participate in a small business HRA.
- Establish legal plan documents. The IRS and Department of Labor have a variety of rules to follow regarding HRAs. Failure to comply with the rules will result in penalties. Your legal plan documents must include the HRA policies including monthly reimbursement amounts and reimbursement eligibility.
- Communicate your new benefit to employees. Since you are going through the work to set up the HRA employee benefit you want to make sure your employees know how to use it. Practical information to include: start date, annual HRA allowance, and how to obtain coverage. Our team at Take Command Health can help onboard your team for you.
- Provide resources for employees to purchase individual health insurance. Choosing a health insurance plan is a daunting task. As an employer, you can provide your employees with tools and information to guide their decision maker. Just beware, federal rules prohibit employers from being involved in the actual decision making when it comes to choosing a provider or policy. Take Command Health can provide the best on- and off-market options or even faith-based plans for your employees based on their needs, their budget, their preferred doctors and their prescriptions.
Does this sound confusing, expensive or both? Don't worry. That's where Take Command Health's new small business platform can help. We'll handle all the accounting and legal legwork, take care of onboarding each of your employees, and make tax time easy and painless. You'll never have to hassle with receipts or worry about setting up a health plan again.
Want to see if an HRA could work for your small business? Learn more about our small business platform or schedule a call with one of our small business HRA experts today.