With the current low employment rate, it is no surprise that the home improvement industry is struggling to attract and retain employees. Often the talented people employers want to hire are looking for a more flexible work environment that includes benefits. Fortunately, there is a way for businesses with an under 50-person workforce to provide health insurance to part-time employees.
Three years ago, 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.
One of the many benefits of the program is that 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, therefore allowing flexibility within the overall employee health benefits program they offer. For example, a small business could decide to offer full-time employees a certain amount and offer part-time or temporary workers a different amount. As a small business insurance broker, the Wharton & Power Insurance Team works with employers to determine an overall budget and create a plan on how to distribute the funds.
Other benefits of the ICHRA program include:
Flexibility in Coverage – Employees use the money provided by their employer to purchase their own health plan, providing them with the flexibility to find an option that suits their needs.
Fewer Restrictions – Prior to ICHRA, small business had a difficult time meeting the requirements for group health plans, such as the number of W-2 employees, participation rates and premium contribution levels. The new rule removes those restrictions while placing more control in the hands of the employer and the employees.
No Set Contribution or Participation Levels – The employer sets the amount of money they want to provide to employees to supplement health care premiums. Also, not every employee has to participate, making no real downside to the employer to offer the program.
If you are struggling to figure out how to provide health insurance and part-time employees, reach out to us. We can help you set up an ICHRA plan that will suit your budget and keep employees happy. Send us an email or give us a call at (317) 663-4138.
