Am I Able to Reimburse My Employees For the Cost of a Private Group Health Insurance Plan?

Wednesday, February 7, 2024 23:15 Posted by Admin

Until a while ago (in 2010, to be more precise), companies would have the option to reimburse their employees for health insurance. This meant covering insurance costs for employees who would choose their own insurance. Covering individual insurance premiums used to be an advantage for smaller businesses that didn’t have to decide on a group plan.

Today, however, it’s not a good idea to try to reimburse the health insurance of your employees before being informed of the consequences of this practice. Companies risk big group plan penalties if they do so, as reimbursement is not subjected to tax and it has to be declared by both the employer and the employee.

However, you can still keep this practice while being safe from tax penalties if you use a health reimbursement arrangement.

What Is a Health Reimbursement Arrangement?

The solution for this type of situation is reimbursing your employees by following an HRA (a Health Reimbursement Plan). It allows your employees to choose their own plans and not comply with a group, one-size-fits-all insurance plan. By using an HRA, you won’t receive penalties and the reimbursement won’t be taxed.

Types of Reimbursement Plans on the Market

Here are the main reimbursement plans you can benefit from:

• QSEHRA (Qualified Small Employer Health Reimbursement Plan): All employees are reimbursed at the same level, using the tax-free payments from you to cover their individual plans or medical expenses.
• ICHRA (Individual Coverage Health Reimbursement Plan): The employees can be reimbursed at different levels, so you can apply a tier-based plan for your company. This is a flexible option that benefits companies of any size and allows them to choose different levels of coverage within the same plan.
• EBRHA (Excepted Benefit Health Reimbursement Plan): Reimbursements are limited to $1,800 a year per employee, and they are meant to cover special medical costs, like vision, dental, nursing home expenses, or long-term care insurance.

Choosing the reimbursement plan that suits you can be confusing. If you have any questions or wish us to help with the entire process, you are welcome to get in touch with Taylor benefits Insurance Agency.

Why Work With Taylor Benefits Insurance Agency?

Working with us has made many customers happy and more productive, strengthening the relations with their employees. We are happy to give you the best solution for your needs, and explore different approaches. It’s not easy for companies to navigate through the insurance system, which is why we explain everything thoroughly and invite insurance agents to present their offers in detail.

We offer you:

• Expertise: We have 25 years of experience under our belt and know the insurance system inside-out. We are up-to-date with the latest changes and requirements and have established long-term relationships with insurance providers.
• Personalized Support: We know that each case comes with its particularities, which is why we take the time to understand what your exact needs are. Our extensive network of insurance providers lets us choose.
• Objective View: As opposed to searching for information from insurance companies representatives, working with us will give you an objective perspective on things. Our main goal is to get you the best insurance for your needs, and we put your interest above that of insurers.
• Simple Solutions: We will find the best solutions in the shortest amount of time. Searching for health coverage on your own can be stressful and time-consuming. Simplify your task by working with us.

Ready to Make Your Choice? Contact Us

If you are looking for an affordable private group health insurance that would cover your employees when they need basic and specialized medical care, don’t hesitate to contact us. Our network of insurance providers is vast and gives us great flexibility through a multitude of options.

If you think reimbursing your employees for their medical expenses is the way to go, we can advise you on the various reimbursement plans you can apply for, and what each of them implies.

Contact us today to get in touch with our expert adviser and improve your company’s insurance plan.