For many small businesses, setting up employee health insurance and other plans may seem too complicated. Many small businesses share a common question, “Can I offer my employees a stipend in lieu of a health insurance plan?”
Employers certainly can offer stipends to help pay for their employees’ individual health insurance plans through health reimbursement arrangements or HRAs. On the other hand, employers need to be aware of the tax implications of HRAs compared to offering employer-sponsored health insurance instead.
There are a few different types of HRAs or health reimbursement accounts with different use cases.
- QSEHRA – Qualified Small Employer HRA
- Designed for businesses with fewer than 50 employees
- ICHRA – Individual Coverage HRA
- Designed for businesses of all sizes
- GCHRA – Group Coverage HRA
- Designed to be paired with an employer-sponsored health insurance plan
Both HRAs and group health insurance have to be administered appropriately and compliant with ERISA. If you are interested in offering either an HRA or group health insurance to your employees, please do not hesitate to contact us to review your options. Our mission at Solid Health Insurance Services is to find your business an affordable benefits package that best fits the medical needs of your employees and the budget of your company. Please contact us at 310-909-6135 or at firstname.lastname@example.org.