Small Businesses Gain Hiring Advantage with Health Insurance

A new federally mandated program, the Individual Coverage Health Reimbursement Arrangement, or ICHRA, is making it easier than ever for small businesses of nearly any size to assist full, part-time, or seasonal employees with the cost of health care coverage.

“As owners of a small, family-run business in Summit County, health insurance has been out of reach for us. We wish it was more affordable so we could provide it to current employees and offer it to new hires…”

Sound familiar?

Attracting qualified workers to your small business in Summit County can be a challenge. Add to that, most employees want their employers to assist with health insurance costs. With traditional options prohibitively expensive for many small businesses, employers have been in a bind.

But help is on the way.

A new federally mandated program, the Individual Coverage Health Reimbursement Arrangement, or ICHRA, is making it easier than ever for small businesses of nearly any size to assist full, part-time, or seasonal employees with the cost of health care coverage.

Peak Health Alliance has begun offering ICHRA (“ick-rah”) across their seven counties in Colorado just in time for hiring season when businesses are looking for a hiring advantage.

ICHRAs were designed to allow more cost control for the business, and more flexibility for the employee, who is no longer stuck with the one group plan your business offers, but can choose an individual plan that suits their needs and circumstances. In addition to potentially substantial savings, an ICHRA offers substantial tax advantages, too.

Team Summit, an athletic development organization in Breckenridge, recently experienced substantial savings by switching to an ICHRA.

“Last year, through a typical small group insurance plan, we provided seven people insurance for over $44,000. This year through ICHRA we will insure 16 people for just under $30,000,” said CB Bechtel, Team Summit’s Executive Director.

Benefits for Any Team

Nearly any sized business can qualify, as long as there are at least two unrelated employees. In addition to Park County joining Peak for the 2022 plan year, Peak is currently available to businesses in Summit, Grand, Lake, La Plata, Montezuma, Dolores, and San Juan counties.

Small businesses have often struggled to fit one plan to the many needs of their staff. Sorting through complex health insurance options while balancing a team’s needs and a business budget makes small group insurance not only expensive, but daunting.

“We’ve had so many small businesses with group plans jump over to ICHRA for the sake of simplicity,” said Elise Neyerlin, Director of Outreach for Peak Health. “The sheer amount of decisions an owner or benefits manager has to sort through is a huge hurdle, compared to simply setting up a set reimbursement amount for staff based on what’s reasonable for their budget,” she continued.

Employers can set up different classes of employees, making it easy to set different reimbursement amounts for each type of employee. Once the plan is set up, the employee has a 60-day window to shop for an ACA-qualified plan that fits their own needs and budget.

Small business owners or their benefit managers can learn more about the process through their broker, or get a quote from Peak’s team.

“A Game Changer”

For Team Summit’s Bechtel, the switch has had benefits beyond savings. “Through ICHRA our organization provides each employee a monthly reimbursement, (and) we use a third-party platform to manage compliance. So far ICHRA has been much easier to manage than our small group plan (and) for seasonal employees ICHRA has been a game changer,” he said.

To learn more about setting up an ICHRA or get a preliminary quote, contact Peak at 970-455-0381 or by email at [email protected]

Quick Q&A about ICHRA
Who qualifies?
  • Any small business with more than one unrelated employee, located in one of Peak’s 7 counties (for the 2022 plan year, Peak will be adding Park County)
How does it work?
  • As the business owner, you determine what the monthly reimbursement will be for individual policy premiums and out-of-pocket expenses.
  • This amount is tax deductible to your business, and the employee’s reimbursement amount is not counted as wages—saving the employee on their taxes, too.
  • Your employee is then empowered to select a qualified plan of their own choosing that suits their needs.
  • Business owners can choose to contribute different amounts to each employee class. For example, you might have one set reimbursement rate for full time workers and another for part time.
Where does my staff get their insurance? Is it limited to a Peak plan?
  • After you choose a platform to set up your ICHRA, employees will have a 60-day window to browse and select a plan, including those offered by Peak.
  • If you set up your ICHRA through a broker, they will assist staff in plan selection.
  • Employees are then be reimbursed for the pre-set amount.
  • Choosing a Peak plan isn’t required. But with the lowest premiums of any plan, a robust network and options designed for our small active community, There’s a reason Peak plans are the most popular in each of its communities.
How do I get started?
  • You can get an idea of your savings with a free, preliminary quote by clicking here: peakhealthalliance.org/ichra-quote/
  • You may administer your plan on your own, or you can talk to your broker and they can set you up usually for a small fee per employee. Don’t have a broker? We can recommend a Peak Preferred Broker.
  • If you have a small group plan, leave enough time to plan your switch and allow your employees to get up to speed. 
Resources
  • Learn ICHRA Basics: Our quick one page summary helps get you started understanding the ins and outs. Read here.
  • Get a free estimate: Peak is providing free, no-obligation quotes to interested employers. Just provide a little information and get comparing! Click here.
  • Share the Facts: Our one pager on ICHRA is a great tool to share with colleagues or your benefits managers. Get it here.