Small Business Health Insurance in Colorado: What to know
Hello, Colorado business owners! We understand that taking care of your employees' health is one of your top priorities. But let's face it, navigating the world of small business health insurance in Colorado can be complex, especially with so many options available out there. You want to provide the best care for your team, but you also need to consider costs and administrative ease. Finding affordable Colorado health insurance that works for your team can feel a bit overwhelming, can't it?
But don't worry, you're not alone. We're here to help! This Small Business Health Insurance Colorado Guide aims to simplify the process and help you understand your options, with a particular emphasis on Health Reimbursement Arrangements, or HRAs. HRAs have been growing in popularity among businesses in The Centennial State, and for good reasons!
Stick with us as we delve into the ins and outs of HRAs, explore how they compare to other health benefits options in Colorado, and discover why they might just be the perfect solution for your business. It's all about equipping you with the knowledge to make an informed decision that suits your company and, most importantly, supports your employees' wellbeing.
So, let's embark on this journey together to find the best health benefits solution for your Colorado business.
This guide covers:
- The choices Colorado small businesses have for health insurance
- The pros and cons of each health insurance option for Colorado small businesses
- Why Colorado businesses are a good fit for health reimbursement arrangements
- What requirements there are for Colorado Small Businesses
- A case study of how one Colorado Small Business benefited from their HRA from Take Command
- How to get started offering an HRA to your business
Navigating Colorado Health Insurance for Companies
According to Kaiser Family Foundation, roughly half of small businesses offer health insurance to their employees (and that number keeps dropping).
Remember, employee benefits aren't just important to ensure that your team is happy and healthy, if you fail to offer competitive benefits, it can bring some serious consequences to your small business.
These might include:
- Financial consequences of hiring and training new hires.
- Risk of losing employees you depend on (and information and ideas) to competitors.
- Crushing workloads from being understaffed.
- Hours lost in recruitment and training for new hires.
Options for Colorado Small Business Health Insurance
When evaluating health benefits for your Colorado small business, it's important to take into account a few factors that will ultimately direct which option is best for your company.
- your budget
- your bandwidth
- how your company is set up
- your location (i.e., how individual and group plan costs vary in your geographic area)
And good news - Colorado has one of the most competitive individual health insurance markets in the country.
Now let's jump into your actual options for health benefits for Colorado small businesses. And fear not, you have several options! Although we will be the first to say that some options are better than others.
Let's get to it.
Here are your options for small business health insurance in Colorado
Your first option is doing nothing. If you have less than 50 employees, you aren't actually required to offer benefits at all. Do we advise this? No. How are you going to recruit and retain talent to support your amazing business idea without competitive benefits?
Ok, moving right along.
Group health insurance for Colorado Small Businesses
Historically speaking, small business group health insurance—or fully-funded insurance—has been the primary option for many small employers who are looking to offer health benefits for their employees. It's also referred to as corporate health insurance or group health insurance and sometimes includes vision and dental insurance for small businesses, if it's included in the plan.
It is geared toward businesses with less than 50 full time employees everywhere except four states where it applies to businesses with up to 10 employees.
The upside? These ACA-compliant plans are well known, tax-free, have solid product options, and are proven to be an effective retention strategy. Coverage is generally guaranteed, meaning that anyone who applies and meets the criteria will be accepted to the program.
Purchase of a SHOP plan may qualify the buyer for the Small Business Health Care Tax Credit.
And yes, there's a downside.
The shortcomings can be detrimental to small business budgets; small group plans are expensive, one-size-fits-all, with unpredictable premium increases year over year and participation rate requirements.
Self-funded Health Plans
Technically speaking, self-insured employers pay for claims out of pocket when they arise as opposed to paying a predetermined premium to a carrier for a small group plan.
This type of plan, also known as a self-insured plan, is usually seen with a large enterprise as a means to control their healthcare spend and manage their own risk pool.
The benefits of this type of plan are that it's more customizable to your workforce, you have control over the health plan reserves so you can maximize your interest income, it’s more affordable per enrolled employee than a traditional plan, there's no pre-funding of health coverage, and you aren't subject to state health insurance premium taxes (usually around 2 to 3%).
They’re also subject to fewer regulations and allow employers to customize their healthcare plan to meet their unique business needs.
And because companies are paying only for the healthcare costs of their own employees, there may be money left over at the end of the year that can go toward other business needs.
Self funded plans, while ideal for some types of companies, really aren't a fit for small companies.
While self-funded plans allow the company to potentially save the profit margin that an insurance carrier adds to its premium, the potential risk is much higher since the company is responsible for paying out the actual claims—especially in the event of catastrophic claims which could potential bankrupt a company.
Risk is inherent to any small business, but adding risk from a self-funded plan is not the type of risk you want to take.
Health Reimbursement Arrangements: A Colorado Small Business Win
First off, let's demystify Health Reimbursement Arrangements (HRAs). An HRA is a type of employer-funded health benefit plan that reimburses employees for out-of-pocket medical expenses and, in some cases, health insurance premiums. It provides businesses with a flexible, cost-effective way to offer health benefits, and it's all tax-free!
Two of the most common types of HRAs are the Individual Coverage HRA (ICHRA) and the Qualified Small Employer HRA (QSEHRA).
ICHRA allows businesses of any size to reimburse their employees for individual health insurance premiums and medical expenses. The key perk? There's no maximum contribution limit, and businesses can offer different allowances to different employee classes, adding an extra layer of flexibility.
On the other hand, QSEHRA is specifically designed for small businesses with fewer than 50 employees. This type of HRA also allows for reimbursement of individual insurance premiums and medical expenses, but it does have annual contribution limits set by the IRS. In 2023, the QSEHRA limit is $5,450 for self-only employees and $11,050 for employees with a family.
So why are health benefits so important? Well, they're a crucial part of any compensation package, helping to attract and retain top talent. Plus, they can improve employee health and productivity, and even reduce healthcare costs in the long run.
Side-by-Side Comparison: ICHRAs vs. QSEHRAs
Navigating the world of HRAs can be a bit overwhelming, especially when it comes to understanding the differences between ICHRAs and QSEHRAs. To make things easier, let's take a closer look at these two popular HRA options in a side-by-side comparison. From eligibility criteria to plan customization and tax treatment, this comparison will help you make an informed decision about which HRA is the best fit for your business and employees. Let's dive in and explore the unique features of ICHRAs and QSEHRAs.
Health Benefits Environment in Colorado
The state of Colorado boasts a well-structured and comprehensive health benefits landscape, with a variety of programs designed to provide residents with access to the healthcare services they need. A key starting point for many is Colorado PEAK, an online portal that serves as a gateway to numerous state-provided benefits, such as Health First Colorado, the state's Medicaid program, and Child Health Plan Plus.
Health First Colorado offers a broad spectrum of health coverage to eligible individuals and families, encompassing services like doctor visits, hospital stays, and prescription medications. For those who don't qualify for Medicaid but still find private insurance out of reach, the Child Health Plan Plus steps in to provide health coverage to children and pregnant women.
In addition to these, Colorado residents have a plethora of health benefits at their disposal. This includes medical insurance that covers an array of services from routine doctor visits to more extensive treatments, dental insurance for routine cleanings to more complex dental procedures, and vision insurance to help with eye exams, glasses, and contact lenses.
The landscape of health benefits in Colorado has evolved over time, significantly impacted by new federal requirements introduced in 2014. These mandated that health insurance plans offer more comprehensive coverage, referred to as Essential Health Benefits or EHBs. EHBs include a minimum set of benefits and services that must be included in health plans, though plans are free to offer more benefits as needed. This progression ensures that residents are provided with a baseline of crucial health services, regardless of the specific insurance plan they choose.
Colorado's health benefits landscape is rich and varied, offering residents numerous options to meet their healthcare needs and ensure their wellbeing.
Unlocking the Power of Colorado's Health Benefits Marketplace
Let's talk about why having a robust individual health insurance marketplace is a big deal when it comes to offering Health Reimbursement Arrangements (HRAs) as a health benefits solution. Picture this: a marketplace filled to the brim with options, where employees can choose the insurance plan that fits them like a glove. Well, Colorado's health benefits landscape delivers just that.
Colorado PEAK is where the magic begins. It's an online portal that opens the doors to a plethora of state-provided benefits, including Health First Colorado (the state's Medicaid program) and Child Health Plan Plus. These programs make sure eligible individuals and families get the coverage they need, from doctor visits to prescriptions. No one's left behind, because even those who don't qualify for Medicaid can turn to the Child Health Plan Plus for support.
But that's not all. Colorado residents have a treasure trove of health benefits at their fingertips. We're talking medical insurance that covers everything from routine check-ups to serious treatments, dental insurance that keeps those pearly whites in top shape, and vision insurance to ensure clear sight and stylish frames.
Hold on, we're not done yet. In 2014, federal requirements stepped in and shook things up. They introduced Essential Health Benefits (EHBs), which are like the basic package of must-have health services. Every plan has to include these essentials, but carriers can go the extra mile and offer even more benefits.
So, why does all of this matter? Well, a strong individual health insurance marketplace in Colorado means employees have a world of options. It empowers them to choose a plan that suits their unique needs, and that's where HRAs come in. With HRAs, employers can pair their contributions with the employee's selected plan, creating a personalized benefits package that puts a smile on everyone's face.
So, let's celebrate Colorado's vibrant health benefits marketplace, where choices abound and employees can find the coverage that's just right for them. It's the perfect foundation for unlocking the power of HRAs and revolutionizing your company's health benefits strategy..
Colorado Small Business Health Insurance Requirements
As a small business owner, you may find yourself pondering the question, "Am I obligated to provide health insurance to my employees?" Well, let's dive into the details.
According to the Affordable Care Act (ACA), also known as "Obamacare," applicable large employers (ALEs) with 50 or more full-time equivalent employees (FTEs) must offer affordable health benefits that meet the minimum essential coverage (MEC) requirements. Failure to do so may result in penalties for these larger businesses.
Do small businesses have to offer health insurance in Colorado?
Good news! Small businesses are not bound by the same obligations to provide insurance to their employees. So, take a breath and know that you have some flexibility in this realm.
Why Individual Coverage HRAs are a Perfect Fit for Colorado's Health Insurance Landscape
Colorado's individual health insurance market stands out as an excellent environment for the implementation of ICHRAs. This is mainly due to the market's competitive nature, affordable individual health insurance offerings, presence of well-known carriers, and an impressive selection of plans. In fact, Colorado employees have an incredible 210 plan options to choose from!
Among all our client states, Colorado has the highest per capita utilization of ICHRAs.
This data reflects the compatibility of ICHRAs with the state's health insurance framework.
The key to employee satisfaction with an ICHRA is choice, and Colorado's insurance market provides that in abundance. The anticipated introduction of a state-level public option will further enhance the range of choices for employees offered an ICHRA in Colorado. As such, both ICHRAs and the public option are set to widen the coverage net for Colorado workers.
Want to delve deeper into the optimal individual health insurance choices in Denver that pair well with an ICHRA? Don't miss our comprehensive guide!
Case Study: An ICHRA Success Story, Snarf's Sandwiches
Snarf's Sandwiches, a popular sandwich shop in Colorado, was seeking an effective way to provide health benefits to its employees. They were faced with the challenge of managing a diverse workforce with various health needs and financial capacities.
The management decided to adopt the ICHRA approach, and that's where Take Command stepped in. With the ICHRA model, Snarf's Sandwiches could contribute a fixed amount each month towards their employees' health insurance costs. This setup allowed employees to pick a plan that best suited their individual needs.
Implementing ICHRA with Take Command Health provided several key benefits to Snarf's Sandwiches:
- Flexibility: The ICHRA model allowed Snarf's Sandwiches to set the contribution amounts that worked best for the business, while employees were able to choose the health plan that fit their unique needs.
- Savings: Adopting ICHRA resulted in considerable savings for Snarf's Sandwiches. The model helped control health benefit costs and also offered tax benefits.
- Compliance and Ease: Take Command handled all aspects of ICHRA administration, from setting up the arrangement to managing reimbursements and ensuring compliance with relevant regulations.
- Employee Satisfaction: Employees expressed high levels of satisfaction, as they could choose the plan they preferred and get reimbursed for it.
This experience highlights how Take Command’s ICHRA administration can help Colorado businesses like Snarf's Sandwiches provide meaningful, flexible, and cost-effective health benefits to their employees.
Read the full story here →
Showcasing Colorado health insurance companies that integrate with ICHRA
The state of Colorado offers a vibrant lineup of eight carriers that provide individual health insurance plans, aligning perfectly with ICHRA usage. Based on the popularity among our clients' employees, here are the health carrier options available in Colorado:
Bright Health Plan: Known for their personalized approach to healthcare, Bright Health Plan provides access to affordable, quality care, and an easy-to-navigate health experience.
Oscar: With a tech-driven approach to healthcare, Oscar offers simple and personal health insurance plans designed with the user's experience in mind.
Cigna: A leading global health service company, Cigna has a vast network of healthcare providers and offers a range of plans to suit different healthcare needs.
Anthem: Anthem is renowned for its wide range of health plan options and extensive provider network, offering coverage tailored to individual needs.
Kaiser Permanente: A recognized leader in healthcare, Kaiser Permanente operates as both a health insurance provider and a healthcare provider, delivering coordinated care to its members.
Rocky Mountain Health Plans: As a part of UnitedHealthcare, Rocky Mountain Health Plans provides access to an extensive network and a variety of plan options.
Denver Health: With a comprehensive network of top doctors and a variety of plan options, Denver Health aims to deliver excellent care to its members.
These carriers have demonstrated strong performance and popularity among Colorado residents utilizing ICHRA. As the health insurance landscape continues to evolve, we expect this lineup to continue providing quality options tailored to individual health needs.
Why HRAs Stand Out for Colorado Businesses
For Colorado businesses looking to provide health benefits to their employees, HRAs offer a compelling option that stands out from other health benefits choices. Let's delve into why HRAs have emerged as an increasingly popular choice for Colorado employers:
Flexibility and Customization
HRAs, like ICHRA and QSEHRA, provide flexibility. Unlike traditional group insurance plans, HRAs allow employers to set their budget. This can be particularly beneficial for small to medium-sized businesses that need to manage costs while still providing competitive health benefits.
Additionally, HRAs can be customized based on factors such as the employee's family size, age, and job role, allowing employers to tailor benefits to suit their team's unique needs.
With an HRA, employees have the freedom to choose the individual health insurance plan that best meets their needs and preferences. This is a significant shift from the one-size-fits-all approach of traditional group health insurance, and can lead to higher employee satisfaction with their health benefits.
HRAs can offer cost advantages to both employers and employees. Employers decide how much they want to contribute to the HRA, giving them control over their health benefits budget. For employees, HRA funds can be used to pay for insurance premiums and qualified health expenses, often leading to lower out-of-pocket costs.
Compatibility with Premium Tax Credits
Employees who are eligible for premium tax credits have the option to choose between applying these credits towards their health insurance premiums or receiving an HRA contribution from their employer. This gives employees more control over their health care spending and makes health insurance more affordable for those who qualify.
Simplicity and Ease of Use
Managing HRAs can be straightforward and efficient, especially with the help of HRA administration services. These platforms take care of the complexities of compliance, record keeping, and reimbursements, making HRAs an easy option for businesses of all sizes.
By offering flexibility, cost-efficiency, and a high degree of choice, HRAs present an appealing option for Colorado businesses looking to offer health benefits to their employees. With the robust individual health insurance market in Colorado, it's an ideal environment for businesses to take advantage of the unique benefits that HRAs provide.
Capitalizing on Colorado's Individual Health Insurance Plans with HRAs
As an employer in Colorado, understanding the synergistic relationship between HRAs and the various individual health insurance plans available in the state is key to creating a sustainable, effective health benefits strategy. By pairing an HRA with one of the prominent carriers in Colorado, you can offer your employees a customized, cost-effective health benefits solution that meets their unique needs and preferences. Let's delve into how different individual health insurance carriers in Colorado align with an HRA to provide a well-rounded, employee-centric health benefits plan.
Bright Health Plan
- Flexible plan options that cater to diverse employee health needs.
- When paired with an HRA, employers can control costs while still providing robust coverage.
- Employees can choose a plan that best suits their needs, enhancing their satisfaction with the health benefits.
- Oscar plans are known for their user-friendly approach, and when paired with an HRA, this could result in higher employee engagement with their health care.
- Employers can help employees afford these comprehensive plans without bearing excessive costs.
- Cigna provides a wide array of plans and a large provider network. An HRA can help make these plans affordable for employees.
- Employers can provide employees access to a top-tier insurer while keeping costs predictable.
- Anthem offers diverse coverage options that cater to various health needs.
- With an HRA, employers can offer access to these broad options while maintaining control over their healthcare budget.
- Kaiser Permanente offers integrated care, promoting preventative health. An HRA can assist employees with costs, making these valuable plans more accessible.
- Employers can enhance the value of their health benefits by pairing Kaiser Permanente's comprehensive coverage with the cost-saving advantages of an HRA.
- Some employees love Kaiser Permanente, others would prefer other carriers. HRAs allow for employees to choose Kaiser Permanente if they want Kaiser Permanente. Problem solved.
Rocky Mountain Health Plans
- Rocky Mountain Health Plans provide a range of options suitable for Colorado's diverse workforce.
- When paired with an HRA, employees can choose the plan that best fits their unique needs, increasing their health benefits satisfaction and overall job satisfaction.
- Denver Health provides plans focusing on community-based care, promoting local health networks.
- With an HRA, employers can offer a localized, community-focused health benefits solution that simultaneously keeps business health benefit costs under control.
Overall, HRAs can work seamlessly with Colorado's individual health insurance market, offering employers a flexible, cost-controlling solution while providing employees the freedom to choose a plan that best suits their needs. The result is a win-win situation for both employers and employees, enhancing the overall effectiveness of the company's health benefits strategy.
Discovering the HRA Advantage for Colorado Businesses
With a competitive insurance market, a diverse range of available plans, and supportive legislation, Colorado presents an ideal landscape for HRAs to thrive. Let’s take a look at the options.
As shown, HRAs can provide the greatest flexibility for employees, the best cost control for employers, and offer tax advantages, positioning them as a preferable choice for many businesses.
Harnessing the Take Command Advantage for Colorado Small Business Health Insurance
When it comes to navigating the intricacies of HRAs and their effective implementation, Take Command stands out as a beacon in the health benefits world. With its roots deeply planted in simplifying health insurance for both businesses and individuals, we aim to help Colorado businesses decode the complexities of health benefits to make informed decisions.
As a leading HRA administration company, we are committed to helping you understand the differences between ICHRA and QSEHRA. Our experienced team is dedicated to assisting Colorado businesses, helping you find the right health benefits strategy that matches your unique needs and budget.
At Take Command, we not only help you comprehend the specifics of HRAs, but we also provide support in implementing them. We handle all the heavy lifting – managing reimbursement procedures, compliance paperwork, and employee education. Our seamless platform ensures your HRA administration is easy, efficient, and compliant with all relevant regulations.
We work in tandem with your team to provide educational resources and personalized support for your employees, ensuring they make the most out of their HRA. We ensure that your employees understand their benefits and feel empowered to take control of their healthcare decisions.
By partnering with Take Command, Colorado businesses can benefit from an ally committed to simplifying health benefits while providing the best possible health insurance solutions. We're here to guide you every step of the way, offering the advantage of expertise, convenience, and peace of mind when it comes to managing your business's health benefits.