As a business owner, you face many issues competing for your time, and employee health insurance may not get the attention it needs. However, it is always top of mind for us, so we thought we’d share an option you may not know about which eliminates barriers to offering benefits to your team.
The ICHRA program was launched in 2019 via a rule issued by the US Departments of Health & Human Services and the Treasury allowing employers to contribute pre-tax dollars for employee healthcare coverage. 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.
We help many business owners in the home improvement industry wade through their choices when it comes to caring for their employees and ICHRA has been a game changer. Under this program, you can set a budget for how much you want to contribute per employee toward health insurance. They receive the money through their paycheck, and then they can choose a plan that best suits their situation.
You may have heard of “grossing up” employee paychecks to help cover benefits, but ICHRA sets up a program that allows for a more streamlined and tax-beneficial process. You are not increasing employee pay, but rather, contributing toward a program that employees can take advantage of tax-free.
Also, previous HRA programs presented a lot of red tape. ICHRA does not set limits such as the number of W2 employees, participation rate and premium contribution levels. With the removal of these restrictions, control is in your hands, as well as your employees.
You may be like other home improvement businesses, where you have different kinds of employees, all of which would appreciate access to health insurance. 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. You may vary your contribution levels per employee and not every employee must participate.
The flexibility and affordability of the ICHRA program have been the solution for many employers who find offering employee health insurance impossible. The Wharton & Power Insurance Team is ready to answer your questions and lead you through the application and enrollment process. To make an appointment, send us an email or give us a call at 317.663.4138.