Some Good News For Small Employers

By Trish Pearson
Insure Your Future

Trish Pearson

Connecticut recently rolled out a new health insurance program that could provide some financial relief for small business owners. It is an individual coverage health reimbursement account, and it is offered through the state’s health exchange.

Businesses with fewer than 50 employees can participate and there is no minimum enrollment required to create a group. An ICHRA provides flexibility for both the employer and the employee. Unlike a group plan, where the employer has to cover at least 50 percent of the premium and generally only one plan is offered, an ICHRA plan allows the employer to determine the amount or percentage of premium to be allocated to each class of employee. Then the employee can choose from a menu of plans offered through Access Health CT.

Here’s how it works: the employer decides on the dollar amount to allocate toward employee premiums. It can be a fixed amount or a percentage of the premium. The employee can choose a plan at the bronze, silver or gold level and apply their benefit allowance toward the premium.

Bronze plans are generally high-deductible plans, with the lowest premium. Silver plans have a deductible that only applies to an inpatient hospital stay or outpatient surgery. All other care has a copay from day one. These are the plans that most resemble traditional health insurance. Gold plans have the lowest deductibles, but the deductible applies to all but a primary care physician visit. In addition to a broad premium range, it allows employees to choose a plan that suits their medical needs. Family coverage is also available and the employer can choose to contribute toward that portion of the premium or not.

Plans are offered by two insurance companies: Anthem and Connecticare. Each offers a number of plans at each level. The premiums can also be paid in a variety of ways. The traditional approach is where the employer deducts the employee contribution from their paycheck and then combines the company match and pays the bill each month. A split billing/payment system is where the employer and employee pay their portions directly, or the employee can pay the entire premium each month and then be reimbursed by the employer. The number of people who enroll would determine which is the better route. As with current group plans, the employer can deduct their contribution as a business expense and the employee’s contribution is on a pre-tax basis.

There are some limitations on plans through the health exchange. First, while most providers accept plans from either insurance company, some only participate with one. It is important to check the provider directory before choosing a plan.

Second, plans on the exchange do not work well out of state unless it is an emergency. This is especially important if there are dependents who are on the plan but who are in college or live out of state.

Third, the application process can be tricky. Employers should not go it alone. Engage the assistance of a broker who is certified on the health exchange to navigate the process and make sure that employees choose the best plan to fit their needs.

Trish Pearson is a licensed independent insurance agent and certified long term care specialist. Contact her at 203-640-5969 or trishpearson281@gmail.com.