Small employer with federal holiday plan/only high deductible HSA needs attractive options

[yorkriver1]

As many of you know, federal holiday groups have no minimum participation requirements. This is a benefit to preserve for a very small employer.

Looking for coverage/benefit suggestions for the rest of 2019 and new additional plan offerings for 2020 for this employer who is the only one at the very small company covered now. There are 1 or 2 employees who waive off.

The employer has an employee covered by parents who will soon be 26 and looiking for employer coverage, and is also interviewing a potential employee looking for coverage at least as good as their current plan.

The plan currently only offers the highest deductible HSA, $6550, offered by the carrier and could ask the carrier to add two other plan options on renewal 1/1/2020. This carrier will do that without any employees enrolling, to make future options available.

Looking for ways the employer could enhance HSA qualified HDHP offering with, say, a post deducible HRA and some hope of other richer benefits for 2020, if necessary. Optionally, the owner could offer an employer HSA contribution

Without a summary of benefits from the candidate's current plan, how is a comparison of employer offerings possible? I have small employers where this request to match/exceed current benefits comes up when interviewing job candidates.

The employer could add dental and vision if at least one more person enrolls, have an interim plan for 2019 (like HSA contributions) then add benefits for 2020.

Input appreciated!

 

[somarco]

OK, I give up.

What the heck is a federal holiday plan?

I have had groups of govt contract employees before but it was not referred to as a holiday plan. Used to have some folks who worked at CDC in Atlanta. Their employer offered a really crappy indemnity plan. Some employees went BK when they had to use it.

 

[yorkriver1]

This is a federal regulation allowing employer small group 1-50 employees, to purchase a group plan with the employer app dated between 11-15 to 12-15 and submitted no later than 12-15.. During that time period the employer can request for an exception to the usual employee enrollment participation requirements of small group.

The employer doesn't have to pay employee premium of at least 50%, (some states vary on the %) which most carriers require, and employees can waive for no reason, and the group will not be ineligible for not enough % of eligible employees signing up.

Quoting from a short article on Word & Brown's website:

"HHS provided final guidance on this in regulation 147.104(b)(1): "In the case of health insurance coverage offered in the small group market, a health insurance issuer may limit the availability of coverage to an annual enrollment period that begins November 15 and extends through December 15 of each year in the case of a plan sponsor that is unable to comply with a material plan provision relating to employer contribution or group participation rules."

My point among others is that this employer can't end the current plan to get a more attractive plan this year without losing the right to have employees enroll or not without any applied requirements of ratio of enrolled employees to total eligible employees.
Therefore the employer must find a way to make the current high deductible plan reasonably on par with probably a silver or gold plan to attract an employee who wants coverage similar in cost and out of pocket to the plan of their current employer.

I have a few of these groups in place, where employers were on individual coverage and looking for a. staying with a BCBS carrier that had left the ACA market, and b. a lower rate than the ACA plans, weighted with higher rates to compensate for lower income enrollees who get moderate to large tax credits.

It's not going to work in all situations, because, say, an employer with no prior group coverage may have some employees receiving rather large tax credits. If they put one of these plans in place, the employees will now have employer insurance available, so in most cases they won't qualify for tax credits on individual ACA plans.

Also, if the employer doesn't want to offer health insurance to all eligible employees, this won't work either, as that's against the law(s).

 

[somarco]

Sounds like the same thing as SHOP plans.

Some agents I know looked at this and took a pass. Too much red tape. Tax credits not worth the hassle.

 

[yorkriver1]

Not at all like SHOP plans. Those have most carriers dropping out of offering them.
"The Affordable Care Act (ACA) requires health insurers to offer a one-month Special Open Enrollment Period, where eligible small groups can enroll in coverage without having to meet standard employer-contribution and/or employee-participation ratios. The Special Open Enrollment Period occurs from November 15th through December 15th each year, allowing eligible small groups to enroll for coverage effective January 1st."

Enrolling employers to offer a regular small group plan, federal law, so all small group carriers make this available, enrolling only employees who want to sign up, and, of course, have to offer to all eligibles. Most owners would pay part of employee premium anyway, the real value is employees who don't want any insurance can waive without ruining the ratio for other employees/owner to enroll.
This not something I advertise, but some clients refer me to others, and it works out.

My question is, post deductible HRA vs. HSA employer contribution, etc. at least for the rest of this year.

 

[somarco]

Seems like a big headache to me.

But then, I got out of the group biz a few years ago . . . about the time carriers stopped paying decent commissions on small group

 

[yorkriver1]

Can't blame you, lots of moving parts for compliance. Re: commissions. Won't name names, but one has reduced a lot, and others haven't, so I am paying attention there. Right now, the group carrier I use pays more than individual, so that's good.

 

[junkman]

Perhaps the employee needs to be educated. People always want a low deductible plan until they find out what the premium is then they want the HDHP. Spend money on premium and it's gone. Buy a HDHP and put the difference in an HSA and it's there when you need it. Put it in a decent stock fund with the market we've had the last 20 years and you have more money still. Benefits are a form of compensation and there is a break point where the employer has the same cost whether paying premium or some form of cash.
One example of a comparable choice would be for a HDHP with the difference between that and a lower deductible plan being put into an employer funded HSA. Which would you rather have - low deduct/OOP or high deduct + HSA cash?

I have an acquaintance working at Kroger with a low deductible. He was bragging about how good coverage was. I ran some group quotes to illustrate and now he's pissed that so much of his compensation is being forced into premiums.

A strategy for improving plans is making 2 medical options available then adding voluntary plans. Employer contribution can be divided between medical and voluntary th get the participation you need.

 

[Kenneth82]

Hey, just curious if there were any updates to this? Did you end up finding a solution? Interested to hear what it was.