Finding and then managing employee health insurance for your small business team can be a job in and of itself. With more options available — from traditional fully-insured health insurance to new level-funded health plans to the newer group benefit (ICHRA!) — which approach is the best for your company's people and budget?
For obvious (semi-biased) reasons, we champion for smaller-sized small businesses (think under 20 employees) the newish type of group health benefit that StretchDollar offers — individual coverage health reimbursement arrangements also known as ICHRAs (and pronounced ICK-ruh). But we also know that we're not the right fit for every small business. The reality is...
Not Every Small Business Needs StretchDollar
There are a lot of small businesses in the U.S. — 33 million of them, according to the Small Business Association. While we believe our platform and service brings a lot of advantages to the table — savings, flexibility, and simplicity — there are specific situations where StretchDollar may not be the best option for a small business. Here, we outline four compelling reasons why a small business might stick to what they have.
Wait — what are ICHRA health benefits?
An ICHRA is a type of health benefit that allows employers to contribute pre-tax dollars to their employees each month to pay for health care costs. StretchDollar’s ICHRA works like this:
The employer sets aside pre-tax money each month (the benefit) to give to their employees to help with their health insurance premiums.
The employee shops for a health insurance plan that fits their needs, and uses the monthly benefit to help cover the cost. (Our licensed brokers help with the shopping part.)
You might be wondering, why haven't I heard of ICHRAs before? The short answer is that it is relatively new. In 2020, federal legislation created ICHRAs expanding HRAs making it even easier for small businesses to access health insurance benefits for their team.
What are StretchDollar Health Benefits
Reason 1: Your small business has more than 50 employees.
StretchDollar is perfect for the smaller-sized small businesses. If your team is nearing 50 full time employees, we might not be the right fit for you. Here's the deal: hitting that 50 full-time-employee mark shifts you into a new compliance category, meaning more paperwork and the risk of government fines if you're not careful. Got more than 50 on your team? You're probably better off looking into more traditional health insurance options.
Reason 2: Your small business is getting a sweet insurance deal.
While StretchDollar can help small businesses save on healthcare costs, there are times when existing group health insurance plans in certain markets can offer deals that are tough to beat. This doesn't happen often – hence the heads up – but we've seen it a couple of times. If you're a small business in an area with exceptionally good group health rates, and let's be real, it's rare but there are some hidden gems out there, it might be best to stick with what you've got.
Reason 3: Your small business doesn’t care about health care costs.
If your small business is flushed with cash to support extensive (and premium) health benefits, congrats to you! It likely means that cost-effective ICHRA health benefits don’t align with your goals. Better is to check-out premium group benefit packages — and hire someone to manage them.
Reason 4: You and your employees like your small group plan.
Some small business owners and their employees like their group health insurance plan. (This is the most rare situation of all!) If you're content with your current approach and not concerned with rising premiums, then sticking with what you have is the best bet.
Making the Right Choice
We recognize that not every small business is a good fit for StretchDollar. If any of the reasons above ring true for you, it might be a sign to explore a more traditional group health benefits option — or stick with what you like.
However, if you've found that StretchDollar aligns with your small business's current challenges and goals, we're here to help you make the switch to a streamlined solution to health benefits.
Learn more about health benefits with StretchDollar or get started here.
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