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Exploring Health Insurance Options for Franchise Owners: What You Need to Know
Making sure employees have access to good health coverage isn't just about ticking boxes; it's about showing that you care about their well-being.
Managing a franchise comes with a lot of responsibilities, and one of the most important ones is taking care of your employees' health. But figuring out what health insurance you need to provide can feel like navigating a maze. That's where the Affordable Care Act (ACA) comes in, setting out rules for bigger franchise owners based on how many full-time equivalent employees (FTEs) they have and how their franchises are structured.
For franchise owners, understanding these rules isn't just about following the law – it's about making sure their employees are well taken care of. It means exploring different health insurance options, from traditional group plans to newer ideas like Association Health Plans (AHPs) and Health Reimbursement Arrangements (HRAs), and figuring out what works best for their business and their team.
Health Insurance Obligations
The requirement to provide health insurance to employees is contingent upon the number of franchises owned and the total number of FTEs. Federal regulations, particularly those outlined in the ACA, mandate health coverage for applicable large employers (ALEs) with 50 or more FTEs. Additionally, controlled groups where one entity owns multiple franchises must adhere to aggregation rules to determine eligibility for coverage.
Available Health Insurance Options
Here are several options for health insurance, according to PeopleKeep:
Traditional Group Health Insurance: This popular option provides a familiar coverage structure for employees, offering reduced rates and comprehensive benefits. Franchisees can procure group health plans through insurance carriers or the Small Business Health Options Program (SHOP) marketplace.
Supplemental Benefits: Integrating HRAs, Health Savings Accounts (HSAs), or Medical Flexible Spending Accounts (FSAs) with group plans enhances coverage by reimbursing out-of-pocket expenses not fully covered by the primary insurance, thus providing financial support for employees.
Association Health Plans (AHPs): In June 2018, the Department of Labor implemented a rule facilitating greater access to AHPs. AHPs enable small businesses to join forces and buy insurance collectively, leveraging their combined purchasing power for lower premiums compared to individual plans. These AHPs, formed or expanded post-rule, adhere to ACA mandates, ensuring coverage for individuals with pre-existing conditions and eliminating annual or lifetime coverage limits.
Health Reimbursement Arrangements (HRAs): HRAs offer flexible options like the Qualified Small Employer HRA (QSEHRA) and the Individual Coverage HRA (ICHRA). These options allow franchise owners to cater to varying employee needs by providing tax-free reimbursements for individual health insurance premiums and medical expenses.
Health Stipends: Health stipends provide flexibility by offering set amounts for insurance premiums and qualified expenses, allowing franchise owners to tailor benefits according to budget constraints. However, stipends are subject to tax implications, requiring careful consideration.
Prioritizing Employee Health
Prioritizing employee health is not just a legal obligation, but also a fundamental aspect of fostering a productive and thriving workplace environment within franchises. By comprehensively exploring and leveraging available health insurance options, franchise owners can not only meet regulatory requirements but also demonstrate a commitment to the well-being of their employees, thereby contributing to the overall success and sustainability of their businesses.
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