Local business owners are increasingly choosing compensation designs, also called 401(K) or specified payment plans. You may ask yourself: “How do I create a wellness plan for my small business?” Let’s walk you through what you need to know.
First, let’s refresh our memory: What is a health and wellness compensation program for small companies?
Small business health and wellness compensation plans, also called QSEHRAs (Qualified Little Company HRAs), are HRAs that are specifically designed for small businesses (companies with fewer than 50 employees). Local business HRAs allow local companies to set aside a fixed amount of money each month for their staff to use to pay for medical insurance coverage or clinical expenses, all tax-free. The staff members are compensated for health and wellness expenses; there is no set amount in the account.
How do I create a health and wellness plan for a small business?
- Select a starting day. You can start your plan immediately if your company does not have a group strategy. If you already have a team strategy, you’ll need to stop it before you begin your HRA. We have covered the steps you need to take to transform from a group strategy to an HRA.
- Set a termination date for your group plan (if applicable). Only for entrepreneurs who currently offer team medical insurance. You’ll have to end the team plan protection before the start of the new HRA. If you want to avoid any type of protection gaps, make sure that the team strategy is completed before the HRA begins.
- Verify who will be eligible. It is required that you provide the HRA to permanent employees. It is your choice to offer the HRA also to part-time employees, but it is not required.
- Set up a budget and allocate funds. Next, you need to determine how much money you will give staff members for medical costs and premiums. You can set a monthly budget (such as 200/month) or you can vary the price based on family size. The minimum payment to be able to participate in a HRA for small companies is not set, but there is an upper limit on the QSEHRA. In 2021, the maximum compensation is $5,300 ($441.67/month) for an individual and $10,700$891.67/month for a family member.
- Create legal strategy records. HRAs are governed by a number of rules from the Internal Revenue Service and also Division of Labor. Failure to adhere to the rules will lead you to be charged. You should include the HRA strategies, including monthly compensation amounts and also compensation qualifications in your QSEHRA plan records.
- Share your new benefit with staff. You want to ensure that your employees know how to use the HRA fringe benefits. Include practical info such as the start day, the yearly HRA allocation and also how to obtain protection. Take Command Health can help you onboard your team.
- Provide staff with information on how to obtain specific medical insurance. It can be difficult to choose a QSEHRA health insurance plan. You can provide your employees with tools and information to help them make a decision. Government policies prevent companies from being involved in the actual decision-making when it comes to choosing a provider or plan. Take Command will offer the best off-market or faith-based plan for your employees based on their needs, budget, medical doctors, and prescriptions.
Are you ready to create a compensation plan for small companies that promotes health and wellness?
If you are having difficulty navigating the complex policies and also conformity requirements, a third party HRA manager, such as Take Command, can save you time, frustrations as well charges. The QSEHRA software will do all the heavy training for you.
We are the only HRA manager who also offers help to people purchasing medical insurance. We can help your employees compare strategies and also look at off-market options. We will assist them to find the best option for themselves, their doctors, as well their prescriptions.
