The fall season means open enrollment for many healthcare plans. Medicare Advantage enrollment began October 15, and individual market coverage enrollment begins November 1. However, recent changes in federal regulations may impact you, your small business and your employees’ options for healthcare.
The biggest change is that employers are now able to set up Health Reimbursement Arrangements, or HRAs, to contribute to the health plan of the employee’s choice. Yes, though they sound similar, this is different from an HSA, or Health Savings Account. HRAs are a fixed amount of money provided by the employer at the beginning of each year, and unlike other similar health accounts, only employers can add money to your HRA. Depending on the plan your employer selects, you may also be able to roll over the HRA funds to the next plan year.
Additionally, small businesses with less than 50 employees can receive a health tax insurance credit if they meet the following criteria:
- The number of full time equivalent (FTE) employees is less than 25.
- The average salary is no greater than $54,200.
- The business pays at least 50% of the employee health insurance premiums.
- The small business buys a plan on the Marketplace or from a qualified partner.
The new rules will still allow consumers to buy short-term healthcare policies, which, while more affordable, may not meet their needs in the same way. Small companies and individuals in a similar industry or geographic area may also set up what is called an association health plan. These must comply with all of the same requirements of any other plan type, including coverage of dependent children up to age 26, prohibitions against charging more due to pre-existing conditions, and unjust cancellations.
This may sound intimidating, but it doesn’t have to be. We encourage individuals and companies looking into these alternative plans to evaluate them against their current plans before making a decision — there may be hidden costs or things that aren’t covered. Whether you’re shopping for your business or yourself this open enrollment season, contact us to guide you through the process.