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Learn the Advantages of Individual Coverage HRA’s

by Ray Seaver | CEO | zizzl llc

As companies re-shift their focus from survival to growth following the pandemic, many employers are placing renewed emphasis on employee health and wellbeing — and rethinking their health benefits packages in the process.

When you’re a business owner, offering employer-provided health coverage is a great way to attract and retain top talent, and improve job satisfaction in the workplace. But over the years, rising healthcare costs have become a source of significant stress for employers and employees, alike.

Since 2010, average family premiums have increased more than 55 percent. In the past five years alone, the Kaiser Family Foundation found that annual family premiums for employer-sponsored health insurance rose 22 percent to an average of $21,342 in 2020, with employers contributing more than two-thirds toward the cost of coverage.

The surge of healthcare costs has forced many companies to reduce benefits and increase employee costs, or worse, opt out of offering health benefits altogether. Each year, we hear from customers who are frustrated by the annual health insurance renewal process and unexpected increases. Whether it’s finding an insurance company that provides affordable group health plans that work for everyone or finding a plan that fits within the company’s budget, the complexity of selecting coverage that satisfies both parties presents a constant challenge.

More than 80 percent of employers that provide coverage only offer one type of health plan to their employees, leaving many workers and their families behind, according to the Employee Benefits Security Administration.

When it comes to growing your business, investing in employee health and wellbeing should be a top priority. A healthy workforce positively impacts work productivity and performance, boosting the company’s bottom line. So, it’s surprising that many employers are still unaware of an ICHRA, which is a simpler way to create quality healthcare benefits for employees and provides employers with complete control over their health insurance budgets.

A New Health Benefits Model

ICHRA, an acronym for “Individual Coverage Health Reimbursement Agreement,” is a new kind of Health Reimbursement Arrangement (HRA). In 2019, the federal government created this new type of HRA which allowed employers to reimburse employees a fixed amount of money each month for health insurance premium and healthcare related out-of-pocket expenses if they used at least some of the money to purchase a qualified health insurance plan.

Today, through an ICHRA, employers can take advantage of this alternative option of providing quality health insurance benefits to employees with the same tax benefits of a traditional group plan. An ICHRA removes the hassles of employers selecting an insurance company or plan and allows employees to choose an insurance company and plan that fits their individual needs, household budget, and lifestyle.

Because employees are free to choose their own insurance company and plan, employers aren’t stuck between reducing benefits or increasing employee costs to keep budgets in line.

It’s also one of the reasons why an ICHRA is a great option for smaller companies, especially if they haven’t offered health insurance before. For larger employers subject to the Affordable Care Act, ICHRA’s keep them in compliance and out of the “penalty box.”

Since an ICHRA first became available to employers in January 2020, there has been a prevailing misperception that these individual health premiums are higher than group premiums. That simply isn’t the case. By providing employees with a greater range of options and allowing more people to shop for health plans in the individual marketplace, health insurance companies are more likely to innovate products and price them competitively. In Milwaukee County alone, there are at least 60 different health plans from five well-known insurance providers from which to choose.

According to the U.S. Treasury Department, more than 800,000 employers are expected to offer an ICHRA to cover more than 11 million employees and their families in the next five years, including by expanding health access to nearly one million workers who were previously uninsured.

Navigating the complex health benefits landscape can be challenging for any size businesses. With an ICHRA, businesses can remove the costs and burden of selecting a single health plan for their workforce and provide employees with a choice they can afford, allowing employers to focus on customers and building their business.

At zizzl Health, we help companies explore their options for high-quality, hassle-free health insurance. If you’re interested in how an ICHRA can work for your business, click here to contact zizzl Health for a free ICHRA Cost and Savings Analysis.

Individual Coverage HRA’s: A Health Insurance Dream Come True?

By Ray Seaver
zizzl | CEO

In June of 2019, President Trump signed into existence the Individual Coverage Health Reimbursement Arrangement (ICHRA).  They became available for employers to use in January of 2020.  Like many business owners, I find the annual health insurance renewal process increasingly frustrating.  It gets harder and harder every year to find an insurance company with affordable plans that work for everyone let alone the company’s budget.  With an ICHRA plan in place, employers don’t pick the insurance company or plans to offer.  Employees buy their own individual health insurance plan with pre-tax money.

The Dream of Budget Friendly, Hassle-free Health Insurance

Many employers, including this one, have dreamed about making health insurance easier to budget and provide by giving employees money to go out and buy their own individual health insurance plan.  But two things have kept us from doing it.  Prior to ICHRA’s, money given to employees to buy their own individual health insurance plan would be treated as taxable income.  Second, a perception exists that group health Insurance plans are better and less expensive than individual health insurance plans.

Contributions in an ICHRA Plan Are “Pre-Tax”

When structured and communicated properly, employer and employee contributions in an ICHRA plan are “pre-tax”, just like contributions in a traditional group plan.  Employers must have a section 125 plan document in place that contains a “pre-tax” premium provision and employees must purchase a qualified individual health insurance plan.

Individual Health Insurance Plans Are Comparable to Group Health Insurance Plans

While this is not the case in every state, many states have several health insurance companies offering a wide variety of qualified individual health insurance plans.  Wisconsin, for example, has 21 insurance companies offering approximately 230 plans across the state.  Plan types vary from HMO and EPO style plans to broader network Point-of-Service and PPO style plans.  Although it varies from county to county, community rated groups plans in Wisconsin are slightly more competitive than community rated individual health plans for similar plan designs.  However, in an ICHRA plan, employees have the freedom to choose from a wider variety of insurance companies and plans that fit their unique budget and provider preferences.  In balance, plan design, provider, and rate differences between individual and group plans in Wisconsin are getting more and more difficult to distinguish.  That trend is expected to continue into 2021.

Making the Dream a Reality

We believe that ICHRA plans are a viable strategy for employers to explore in states that have a competitive individual health insurance market like Wisconsin.

Today, we launched zizzl Health for Wisconsin based employers.  With zizzl Health, employers don’t pick the insurance company or plan for their employees.  They simply decide what they want to contribute and zizzl helps their employees find their own individual health insurance plan.  We do that with a tailored list of carefully selected plans from a variety of insurance companies, personalized assistance, and easy to use recommendation tools. 

zizzl Health gives employers permanent control over their health insurance budget.  No matter what an employer decides to contribute each year, employees will find options that work for them.  It’s a budget friendly, hassle-free way to provide health insurance.

To learn more, visit zizzlHealth.com or call 414-800-2018.

Compliance Keeping You Awake: ACA, ICHRA, EBHRA

By: Rob Goll
zizzl | VP Business Development

Companies are challenged by staying up to date with compliance issues because of new and constantly changing legislation. The challenges with the ACA, new ICHRA, new EBHRA and much more are a time-consuming burden.

The ACA alone is extremely complex and often changing. ACA penalties for businesses are very real. According to the Congressional Budget Office, the IRS could collect more than $200 billion from applicable large employers (ALEs) over the next ten years. Recently the House Ways & Means Committee approved The Employer Relief Act. This bill would retroactively wave the employer mandate from 2015 through 2018. How do you stay up to date?

Now introduce the new HRA options. The U.S. departments of Health and Human Services, Labor and the Treasury introduced the Excepted Benefit HRA (EBHRA) and the Individual Coverage HRA (ICHRA). The one getting a great deal of attention is the ICHRA. The issued final rule allowing employers of all sizes that do not offer a group coverage plan to fund a new kind of health reimbursement arrangement (HRA). FAQs on the new rule. These changes are being studied by attorneys, accountants, and brokerage firms to understand all the implications.

Companies must stay compliant with these constant changes. Working with a benefits consulting firm that integrates benefits technology with your HRIS and payroll solutions will help keep you compliant  and get your leadership team back to the campfire.

PEO It’s Time To “Go”: When leaving a PEO

By: Rob Goll
zizzl | VP Business Development

The top reasons we hear from companies leaving a PEO are cost, culture, health plan and carrier flexibility. Any of these reasons and others have employers leaving PEO’s as their companies grow. It is clearly a commitment to the future. The struggle is when it is time to “Go” what is the next step?
The following are five major areas of consideration:

  • Federal Tax Withholdings: Check if your PEO is registered with the IRS as a Certified PEO (CPEO). This would prevent FICA and FUTA wage bases from restarting if a business leaves sometime after the first of the year.
  • State Tax Withholdings: Rules vary by state and you must know if you need to reinstate your state unemployment tax (SUTA) account. There are states that record a company’s claims history when with a PEO. Other states may require you to restart your tax rate or even go back to the base rate until you build a claims history.
  • FSA: An FSA is owned by the employer. Therefore, when the PEO is the employer/co-employer and the agreement is discontinued employees may not be able to secure the FSA funds. There are PEOs that will not process claims after the agreement is concluded. This can be true even if the claim was filed before the date that the agreement was discontinued. Contact your PEO to understand all the facts and if necessary, advise your employees so they can spend their FSA funds.
  • Medical/Dental Deductible: Check the effective dates for change as a result of leaving the PEO. PEOs can have one standard date but others grant each company the option to choose their date. Employers need to make sure that if the deductibles and out of pocket maximums do reset that employees are informed that they may have extra out of pocket expenses.
  • COBRA: After leaving the PEO the PEO can charge fees to manage COBRA members.

When committed to leaving a PEO a trusted benefits advisor that has experience in helping companies exit PEO’s can be invaluable. They will help you pull together benefits, payroll, 401k, LTD, STD, life insurance, liability insurance and more. This is the perfect time to tie it all together with modern HR technology, including a benefits administration tool. You’ll be glad you did.

Successful Onboarding Starts with a Plan

Rob Goll
zizzl | VP of Business Development

Every company needs to consistently consider improving their onboarding processes. Take a look at the US Bureau of Labor Statistics, this shows that three million people have left their jobs voluntarily every month since June 2017. While there is a plethora of possible reasons, certainly the onboarding process must be a player in the decisions made by these many employees over time.

Having a well-planned and communicated onboarding process greatly influences an employee’s initial impression of a company. When looking at improving an onboarding process the planning always starts with how long the formal process should take. You would have to admit it is difficult not to agree with the following  article from SHRM that supports “onboarding is a comprehensive process involving management and other employees that can last up to 12 months.” You need to make sure that the process, no matter it’s length, fits your company’s needs.

As you take the next steps to build a comprehensive onboarding plan there are many considerations that need to be addressed. Think about your company values, culture, education, training, performance, evaluations, reviews and more. Developing a detailed onboarding plan is a daunting task. If you are looking for guidance, one resource is the SHRM Foundation’s Effective Practice Guidelines Series; Onboarding New Employees; Maximizing Success Taylor N. Bauer, Ph.D.

In your planning, special consideration needs to be given to those first days and experiences of an employee. They do leave a lasting impression, yet we must get through all the administrivia. Many of us can remember the painful days of old when we had to complete stacks of paperwork. By the way, using online catalogs and pdf’s is not altering that experience. Pointed out by CAREERBUILDER: “Technology has provided us with tremendous tools for communication throughout the employee experience. One area that is of importance is the new hire onboarding process. The experience for employees in the few weeks prior to and after joining your organization sets the tone for them. It’s a time of both great anticipation but also great uncertainty for employees. This makes communication critical.”

Analyzing your onboarding experience and processes on a regular basis, always looking for improvement, will help make your company more successful.

What do Payroll and Benefits have to do with making a great work culture? Let’s talk about it.