DWI – Health Insurance

Health Insurance

A Tipping Point to Hiring Quality Employees

Health insurance is probably one of the most confusing industries on the planet at the moment, especially in the United States. Often times, employers look to help employees get quality healthcare, they just don’t know how to start. When it comes to hiring, offering a healthcare choice can become the difference between hiring a lackluster employee, versus an employee that will really produce well. Especially when it comes to families, health insurance is one of the most important topics in America.

Basic federal law states that if you are in a company that is under 50 employees, you do not have to offer health insurance. Since this is about 99% of diesel shops, this is the group we’ll mainly be dealing with. Just because you’re not offering a comprehensive integrated health plan however doesn’t mean that you can’t help with health insurance for your employees and your employees’ families. We’ll look at a few different options, starting with a health stipend.

Health Stipend

A health stipend is a dollar amount that is fixed, that is offered by the employer to the employee, so that the employee is able to better afford health insurance. One important factor about a health stipend is that the money actually doesn’t need to go towards health insurance. If the employee wishes, the money can be just tagged on as extra wages instead of going towards actual insurance. The employer doesn’t ask for any proof of insurance from the employee, and monies are treated just like normal payroll income. This is probably the least obtrusive and easiest way for an employer to help with health insurance.

Full Health Coverage

If you want to go the complete opposite route of a health stipend you can always opt to pay for insurance coverage for your employee. There are a few upsides and a few downsides for this. One of the upsides is that you are able to choose the policy, and therefore control things like the deductible, out-of-pocket expense, and what is covered and not covered. You are also able to put a consistent dollar figure on the policy so that you will know exactly how much money you’re paying out. The downside of this is that it’s going to be incredibly expensive. For even a single person, a high-deductible health insurance policy is at minimum $400 a month and can go up from there. A family policy can be anywhere upwards of $1,000 to $2,000 a month. Now keep in mind you don’t have to offer this to all employees, but for someone like a head of sales, vice president or shop foreman it can be a great gesture.

Health Reimbursement Account

Perhaps the best option for small businesses is a Qualified Small Employer HRA (known as QSEHRAs). This allows businesses to reimburse their employees directly for health care costs and do so pre-tax! This is called a health reimbursement account, and it depends on the employee to get his or her own insurance, while the employer OK’s a given amount towards their policy. As of 2019 the maximum amount that can be given for an individual is $5,150 and a family is $10,450. The benefit of this is the lack of taxes, yet it is still something that is deductible as an employer for a business expense. Out of all the options the QSEHRA is probably the one worth most looking into.

Well it may seem a bit much to provide Health Care if you’re a business of just two to three employees, it’s something that as an employer you should seriously look at. The old adage that you give a little and get a little works in this case, and in hiring and holding on to quality employees, health care can be an obvious tipping point.

Contribution Source: https://www.peoplekeep.com/blog/2019-qsehra-contribution-limits