Less than half of businesses with 2-9 employees offer group health insurance. (Source: SBA.gov/advocacy. More stats HERE.)

Here’s an example that might explain why.

Albert has 9 employees. Business is good. Would a group health plan help him retain and grow staff?

To date he’s just allocated extra taxable monthly payments to help employees buy their own coverage (also adding to payroll taxes).

A similar ‘defined contribution’ toward the cost of a group health plan would be tax deductible to his company and a tax free benefit to each participant.

However . . . .

Currently, half his employees qualify for generous tax credits through the ‘Obamacare’ Marketplace. By ‘offering’ group coverage, those end.

Unless Albert can pay 90% of the premium (business isn’t that good!), employees’ costs actually increase.

Enter the QSEHRA; Qualified Small Employer Health Reimbursement Arrangement.

QSEHRAs allow tax deductible premium reimbursements; up to $5,000/year for single coverage, $10,000 for family (tax free). Marketplace tax credits are offset by the amount Albert pays, but not lost.

In related news, CVS (Aetna) just announced they are entering the individual market for 2022. H-m-m-m-m. More choices. Stabilized premiums.

Albert, there’s a reason nearly 90% of larger (>25) employers have group coverage.

But for now, let’s start smart!