By Are you an engineer in the market for a new health insurance plan for your team? Many engineers work in small businesses that do not offer a traditional group health insurance plan. In these situations, a Qualified Small Employer Health Reimbursement (QSEHRA) may be the right option for your business.
What is a QSEHRA?
A small business HRA is a flexible way to provide health insurance to your employees. With this program, the employer reimburses employees on a monthly basis for the cost of a premium for a health insurance plan of their choice.
For example, you may choose to reimburse employees at your company $200 each month towards their health insurance costs. Each engineer can choose which health insurance plan best fits his or her needs and apply the money towards the cost of the premium.
Why is a small business HRA good for health insurance for engineers?
Employers appreciate not having to choose a one-size-fits-all group health insurance plan for their employees, as well as avoiding the administrative and legal work that comes with setting up a group insurance plan.
With a QSEHRA, your monthly costs are fixed. You can determine the level of your monthly reimbursement, or “defined contribution” and know that it will stay the same month-to-month. Unlike with a traditional health insurance plan, you do not have to budget for fluctuating or unexpected costs.
A small business HRA allows your company to offer health insurance that is competitive with larger companies without the administrative headache of having to set up a group plan.
Why do small business employees prefer a QSEHRA?
With a small business HRA, engineers and other small business employees have the flexibility to choose the plan that is right for them and their families. They can choose to join a spouse’s plan, pick a plan that covers a specific medical condition, medication or provider, or stay on the plan they had before starting their current job without changing prescriptions or doctors.
What are the costs?
One of the most appealing elements of a small business HRA is that the employer can decide what the cost will be every month. The maximum annual refund for a single employee is $5,050 and the maximum refund for an employee with family costs is $10,250.
The monthly contribution is completely funded by the employer. It cannot be deducted from employees’ paychecks and they cannot be asked to contribute to it.
In general, the monthly reimbursement amount must be the same for all of your employees, although it can vary based on seniority and familial status.
Does my business qualify?
If your small business has 50 employees or fewer and does not currently offer a group healthcare plan, you can elect to participate in the small business HRA program.
Your employees are eligible if they are fulltime, which the program defines as working at least 30 hours a week for at least 120 consecutive days. Your seasonal or part-time employees do not qualify for a reimbursement.
Ready to get started?
Setting up a QSEHRA is easy with Take Command Health. We have detailed directions for how to get started as well as a platform that simplifies onboarding, finances and set up easy. Contact us through the link below to find out how we can help you provide your employees with straightforward and high-quality health insurance.
Hungry for more? The introduction chapter to our handy new QSEHRA guide is a great place to start.
