Today, less than 50% of small businesses - employers reimbursement of insurance premiums employees traditional health insurance, mainly because of the cost. Instead, they are accepting payment models offer affordable health benefits. This article covers the basics of employer reimbursement of health insurance premiums, including what it means and why small business is ours to perform quickly.
employer reimbursement of premiums Health Insurance - The Basics
with an employer compensation model is the company to help a refund plan employees with their individual health insurance premium costs.
There are three basic ways a company can go about this:
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taxable Stipend - The company taxable stipend to use employee on health insurance. The employee insurance costs have not been established
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taxable Healthcare Allowance -. The business staff costs reimbursed for their justified individual health insurance on a tax basis.
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Tax-free free ~~ POS = HEADCOMP healthcare reimbursement plan - The Company used a portion 105 Medical reimbursement plan to employees for their justified individual health insurance costs on a to report pre-tax basis. This type of plan must be designed to comply with the Affordable Care Act of market reforms.
Why small businesses are adopting Reimbursement Models
The employers are adopting employer reimbursement of health insurance premiums for three main reasons:
1. controllable costs
group health insurance costs are on an unsustainable course. The costs have become prohibitive for small businesses and their employees. Many have already canceled policies because of the cost or never been able to afford a group policy for a start.
reimbursement of employees for individual health insurance can control the cost of the employer because the employer determines how much to contribute to the repayment plan. Unlike traditional group health insurance, there is no minimum contribution requirements.
2. Individual health insurance costs 20% to 60% less
20 to 60 percent cost On a similar note, i ndividual health less as group health insurance for the same or better coverage (see this state by state comparison of insurance premiums Health).
And this does not prevent the application of premium tax credits. For eligible employees, lower premium tax credits, the cost even more.
What does this mean for employers is that a contribution of $ 0 / month per employee, for example, continues with individual health insurance than it does with groups insurance.
3. Individual health insurance is better for employees
Finally, individual health insurance now for employees is just as good - if not better - than group health insurance. Once formed, employees prefer individual health insurance group health insurance due to two distinct advantages:
- choice - select employees the coverage and the doctors that best fit the needs and budget for their family ,
- portability -. the employees keep their health insurance when they leave the company, because the individual health insurance belongs to the employee and is independent of the employment
Questions about your employer reimbursed the health insurance premiums? Leave a comment below.
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