Health Reimbursement Arrangements are flexible structures that allow an employer to contribute directly to an employee’s healthcare spending. Whether you want to offer money towards health insurance premiums or other expenses, a health expense account allows you to give money to your employees in a tax-advantaged way.
Health insurance costs are one of the highest for many small businesses. Offering benefits is important to attracting and retaining your employees, but that has to be balanced with your budget. In certain instances, offering your employees a health reimbursement arrangement to purchase their own health insurance saves you money while also giving your employees freedom of choice.
Health Reimbursement Arrangements vary and Liferaft can help you select which one would be the best fit for your business’s needs. Small businesses offering health insurance can find potential cost savings by transitioning health insurance to a health expense account.
An employer with 20 employees in New Mexico is offering all of their employees fully paid health insurance. Through the small business marketplace, the employer offers a silver and gold level plan with total annual expenses of $250,000.
With a Liferaft Health Reimbursement Arrangement, the employer offered every employee the equivalent budget of a gold-level plan that was purchased by each employee individually. The employer was able to save over $150,000 per year on annual expenses and each of the employees selected the plan that was the best fit for their personal needs.
Employers who choose to optimize their budget for healthcare spending with a health reimbursement arrangement benefit from the flexibility, cost-savings and limited restrictions.
Email our COO and Co-Founder Nimish Shukla (email@example.com) and our team can provide you with a personalized quote to see if a Health Reimbursement Arrangement will help your small business.