Group Health Insurance

January 16, 2020
employee group health benefits

ICHRAs Offer a New Landscape for Small Business Employee Health Benefits

In mid-June 2019, the US Departments of Health & Human Services and the Treasury issued a rule allowing employers to contribute pre-tax dollars for employee health care coverage through a new health reimbursement arrangement named ICHRA. Like previous HRAs, employees can use employer funds to purchase health coverage from the public exchange or other insurance plans. However, this ruling lifted many restrictions on how companies could use HRAs or even qualify for group health plans, such as employee participation rates and affordability. This news changes the game for small business employee health benefits. The flexibility and options offered by this new ruling are not well known, but Wharton & Power Insurance has already assisted many local employers in taking advantage of this opportunity. For example, we helped three small business clients offer ICHRAs to their employees: a remodeler with 12 employees, a homebuilder with 12 employees and a restaurant with 70 employees. Benefits of ICHRAs in Offering Small Businesses Employee Health Benefit 1) Flexibility in Coverage By allowing employers to provide funds for employees to choose their own coverage, ICHRAs provide the flexibility for employees to determine their budget and coverage, rather than the employer. 2) Fewer Restrictions Small businesses had a difficult time meeting the requirements for group health plans, such as the number of W-2 employees, participation rate and premium contribution levels. ICHRA removes those restrictions while placing more control in the hands of the employer and the employees. 3) Wider Employee Definitions ICHRA allows contractors, 1099, W-2, seasonal and temporary employees to participate, though they must be of similar employment class, such as hourly or salary. Employers may vary their contribution levels per employee. 4) No Set Contribution and Participation Levels The employer sets the amount of money they want to provide to employees to supplement health care premiums. And, not every employee has to participate, making no real downside to the employer to offer the program.   How ICHRAs Work Once a budget has been set and the paperwork has been filed, an insurance broker like our Wharton & Power Insurance Team will work with employees to choose a health insurance plan that works for them. Considerations include the amount of money coming from their employer, their personal budget for health insurance premiums and the coverage they need. W&P then explores the options offered through the public exchange and private insurers. We also test for federal subsidy opportunities which can further reduce the employee’s cost of coverage. Rather than a company-wide group meeting about coverage options, the employee experience is more personal and has the potential to provide more beneficial coverage. With W&P, there is no cost for this service. Partnering this program with Wharton & Power Insurance can make taking advantage of this new option easy for your business. We have been working with employers and employees on both group and individual policies for over 30 years. We can help guide you through your budgeting decisions, set up your program and then work with your […]
November 20, 2019
group health benefits

Why Employers Continue to Offer Employee Health Benefits

It’s renewal season for most companies that offer employee health benefits. As the costs of offering health care have continued to rise, this time of year can come with hard choices. With the passage and gradual implementation of the Affordable Care Act, some businesses have considered abandoning offering health benefits, but continue to hang on regardless of their bottom line. Others have chosen to eliminate their plans, increasing employee pay instead to help them afford their own insurance. However, those employers are now returning to their previous ways. Why do employers continue to offer employee health benefits? For a few reasons: 1) To retain employees – Even though the increased income and ACA plan choices gave employees more flexibility with their health benefits, losing that employer benefit also brought complexity and fear. Workers are accustomed to this “perk” and can feel less valued by an organization that does not invest in their well-being. Wading through the ACA-approved insurance plans each year is frustrating and time-consuming. Businesses run the risk of good people leaving for organizations that offer employer-based coverage. There is a high value placed on peace of mind, not just by the employee, but by the employer as well. Offering quality employee benefits tends to be a common trait of companies committed to creating a desirable place to work. 2) To attract employees – One of the most common complaints among business owners is the challenge of finding quality employees to hire. Once that rare gem is found, employers must have an attractive package to offer, which for most workers includes more than salary and PTO. Health benefits can be an important value-add to attract a stellar workforce. 3) There are cost-effective alternatives available – Organizations facing large rate increases in their group health insurance premiums are looking for more affordable alternatives. One of those options is to contract with a Professional Employment Organization, or PEO. For a business with a healthy workforce, the unique role PEOs play in the health insurance world can be particularly beneficial. PEOs are designated as MEWAs, Multiple Employer Welfare Arrangements, which are exempt from the ACA’s community-rated requirement placed on most health insurance providers. This allows PEOs like Indiana-based WorkSmart Systems to offer private group health insurance plans, allowing employers to take advantage of the power behind economies of scale. A co-employment PEO, WorkSmart medically underwrites its plan for its 9,000 co-employees, with multiple benefit options. Employers are able to offer the quality coverage of a Fortune 500 company while managing their costs. WorkSmart also offers other HR services to help businesses be more efficient with their time and money, such as payroll, HR administration, and an HRIS platform. Continued change is on the horizon in the health insurance landscape. Regardless, businesses still want to attract and maintain a quality workforce while managing their bottom line. Reach out to us for more information on WorkSmart, as well as other opportunities to help you achieve this goal.
July 17, 2019
PEO

PEOs: The Difference Between Full Co-Employment and ASO Models

As business leaders review the PEO marketplace for human resource services like payroll, employee benefits and HR administration, two options emerge: a full co-employment model and an ASO model. What are the differences? Why choose one over the other? A co-employment PEO is a Professional Employer Organization that provides small to medium-sized businesses with HR services through a co-employment model. An ASO PEO is an Administrative Services Organization that also serves as a source for HR services but without a co-employment agreement. Both models aim to streamline the behind-the-scenes administration requirements associated with having employees. It is important to note that co-employment does not mean the PEO delves into the day-to-day operations of a business. They are there to add efficiency, structure, and accountability to the backend of an organization. The Benefits of a Co-Employment PEO: The Power of Pooling: A co-employment PEO combines all of their clients’ employees into one group, creating one large pool to cover under a group health plan. This pooling allows the PEO to offer the bargaining power of large businesses to small and medium-sized businesses, which can lead to better coverage and lower premiums. The ASO model is based on outsourcing services separately for each employer that contracts with them. While ASOs also alleviate their clients from the responsibility of finding and implementing a group health plan, they are not able to offer smaller employers the preferred rates and benefits available to large companies. Full Suite of HR Services: With co-employment comes a full array of human resource services: health insurance, payroll functions, HR admin, HRIS, reporting and compliance. The PEO essentially takes on responsibility for their client’s employees like they are their own. The organization enrolls those employees in a timely manner into a group health coverage plan, provides payroll and payroll reporting, and manages COBRA and COBRA compliance as well as other human resource functions. An ASO is based on a cafeteria plan model, where an employer can pick and choose which services they would like to outsource. This type of PEO may not be able to reap the benefits of the bargaining weight of larger organizations, as it may not have enough participants in each service line. The co-employment PEO model includes many benefits to a small or medium-sized employer. Case in point, Worksmart Systems is an Indiana-based PEO that has been offering HR outsourcing services for 21 years. They provide a group health insurance plan. By pooling health risk-rating groups over many employees, Worksmart can offer small to medium-sized businesses competitive rates that larger businesses enjoy. Questions about PEO services? Send me an email, or give me a call at 317-663-4138.
June 11, 2019
Value_of_a_PEO

The Value Proposition of a PEO

How we work has changed quite a bit over the last decade. We’ve seen growth in the gig economy, and in the complexity of employment regulations. Even if your organization is fortunate enough to still have human resources professionals on staff, it can be difficult for them to stay up-to-date in this quickly changing world. A Professional Employer Organization, or PEO, offers your small to medium sized business the opportunity to efficiently manage these employee-based business operations. When you partner with a PEO, you are getting the benefit of economies of scale, shared liability and expertise. As a co-employer, the PEO streamlines your business operations, and provides a safety net for your decisions. They are not there to make day-to-day decisions about how you run your company – that’s your area of expertise. A PEO adds efficiency, structure, and accountability to the backend of your organization. PEO Services: Payroll: Once you have entered the co-employment status with a PEO, services begin with payroll. As the financial management center for employment, how you pay your employees is the key to the tracking and reporting requirements for your business. Quality PEOs go above and beyond the typical payroll service company by offering you access to other services, such as streamlined ACA reporting requirements and a pooled cost structure for areas like employee benefits and worker’s compensation. Employee Benefits: With the increasing cost of providing employee benefit plans, as a business owner you may be feeling squeezed. You want to take care of your employees, but the bottom line has to come first. A PEO is a great solution to this problem. Your business joins one large group plan, taking advantage of the economies of scale enjoyed by much larger organizations. For example, Worksmart Systems, an Indiana-based PEO, offers a self-funded plan offering four options, with 8,000 participants. They partner with Anthem, whose expansive network in Indiana offers greater discounts leading to more cost savings for you and your employees. Worksmart allows you to offer your employees a menu of benefits like a Fortune 500 company! Human Resources: During the economic downturn, many businesses downsized their non-revenue generating staff like human resource managers. However, that skill set is still needed. PEOs can serve as your human resources department, providing a wide range of services from employee training, hiring and termination assistance, and downsizing plans to EEOC claims, mandatory postings and employee handbooks. If you already have an HR department in place, PEOs can create an infrastructure to manage your day-to-day operations more efficiently. By offering a system that streamlines the multiple vendors that come with medical and dental benefits, 401k plans, payroll, worker’s comp, etc., PEOs allow your HR professionals to focus on the human aspect of their job. Benefits and HR Compliance: Businesses are finding it more difficult to stay in compliance in this constantly evolving world of employment law. The Affordable Care Act reporting requirements alone have placed a greater burden on business owners. Employers also must follow strict procedures within […]
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