What should employers do to prepare for open enrollment?

Employers should set their benefits budget, review and tailor benefit options, create a communication strategy, and provide employee resources. By being proactive, employers can make the enrollment process as simple as possible for their staff.

When should employers start preparing for open enrollment?

Employers should begin preparing well before the enrollment period starts. This gives them time to review benefits, communicate changes, ask for employee feedback, and provide resources. This gives employees enough time to select their health coverage and other benefit plans.

How can employers make open enrollment easier for employees?

Employers can simplify the process by communicating early, offering multiple ways to learn about benefits, providing access to benefits specialists, and using a digital enrollment platform where employees can access information and complete enrollment.

How should employers communicate open enrollment information?

Employers should use multiple communication channels, such as emails, group meetings, webinars, benefits guides, and one-on-one sessions. Communications should clearly explain available benefits, important deadlines, and where employees can get help.

Can employers offer an HRA during open enrollment?

Yes. Employers can work with an HRA provider, such as PeopleKeep by Remodel Health, to design and offer personalized HRAs that help employees pay for individual health insurance premiums and other eligible healthcare expenses. Employees with an HRA can use the ACA Open Enrollment Period to enroll in or switch to qualifying health coverage so they can participate in the benefit.

Is an HMO or PPO better?

Neither plan is better for everyone. It depends on a person or family’s individual needs. An HMO may be a better fit if you want lower premiums and out-of-pocket costs and don’t mind using a smaller provider network. A PPO may be better if you want more provider flexibility, out-of-network coverage, and the ability to see specialists without referrals.

What is the main difference between an HMO and PPO?

The difference is flexibility. HMO plans generally require members to use in-network providers and get referrals from their primary care provider to see specialists. PPO plans offer a broader network, don’t require a PCP or specialist referrals, and cover some out-of-network care.

Is a PPO more expensive than an HMO?

Generally, yes. PPO plans typically have higher premiums and may have higher out-of-pocket costs than HMO plans. In 2025, the average annual group premium was $9,818 for self-only PPO coverage compared to $9,229 for self-only HMO coverage.

Can you see a specialist without a referral with a PPO?

Yes. PPO plans don’t require members to get a referral from a primary care provider before seeing a specialist. In contrast, HMO plans typically require a PCP referral for specialist care.

Can an HRA be used with an HMO or PPO?

Yes, CHOICE Arrangements, QSEHRAs, and GCHRAs can all work with HMO or PPO coverage. Depending on the HRA type, employees can use their tax-free HRA funds to help pay eligible healthcare expenses and, in some cases, individual health insurance premiums.

What are the four main types of health insurance plans?

The four common types of health insurance plans are PPO, HMO, EPO, and POS plans. They differ mainly by provider networks, out-of-network coverage, costs, and whether you need a primary care provider or a referral to see a specialist.

Which type of health insurance plan is usually the cheapest?

In most cases, HMO plans have lower monthly premiums than PPO plans, although the actual cost depends on the metal tier, location, deductible, and other factors. EPOs can also offer relatively affordable premiums because they limit coverage to in-network providers.

Which health insurance plans let you see specialists without a referral?

PPO and EPO plans typically allow you to see specialists without a referral. In most cases, HMOs require a PCP referral, while POS plans require referrals to see specialists. Exact rules can vary by plan, so check your plan documents before receiving care.

Which health insurance plan gives you the most flexibility?

PPO plans typically offer the most provider flexibility because they cover both in-network and out-of-network care. However, you'll usually pay more for out-of-network services. EPOs, HMOs, and POS plans tend to have more restrictions on how you access care.

What is the difference between an HMO and a PPO?

The main difference is provider choice and out-of-network coverage. HMOs have narrower networks, don't cover most out-of-network care, and often require PCP referrals for specialists. In contrast, PPOs tend to offer broader provider choice, cover some out-of-network care at a higher cost, and usually don't require specialist referrals.

Can health insurance premiums increase because of claims?

Yes, for certain types of group health plans. An insurance company can consider a group’s claims experience when setting rates for some fully-insured large-group plans, while claims directly affect costs for self-funded plans. However, ACA-compliant individual and SHOP plans can’t use employer claims history to determine premiums.

Can an employer’s health insurance premium go up at renewal?

Yes. Group health insurance premiums can change at renewal based on factors such as healthcare costs, utilization, the group’s risk profile, and, for plans subject to experience rating, the group’s claims history. Employers commonly review these changes during their annual renewal period.

Does an employee with high medical claims increase everyone’s health insurance premiums?

Potentially. For a fully-insured group plan subject to experience rating, high-cost claims can result in premium increases for the whole group. In a self-funded plan, high claims can directly increase the employer’s claims expenses and may affect future stop-loss costs. Insurers can’t charge an individual employee a higher premium because of their personal medical history.

How can employers reduce health insurance costs after a high-claims year?

Employers can compare alternative plan designs, evaluate level-funded or self-funded options where appropriate, review stop-loss coverage, or consider an HRA such as a QSEHRA or CHOICE Arrangement (formerly ICHRA). An HRA can give employers more predictable costs because the employer sets a defined contribution amount, known as an allowance, rather than assuming the claims risk of a traditional group plan.

Is a CHOICE Arrangement a good alternative to group health insurance?

A CHOICE Arrangement, formerly known as ICHRA, can be a useful alternative for employers that want more predictable healthcare costs and less exposure to group claims. Instead of sponsoring traditional group coverage, the employer provides their employees with a fixed monthly allowance that they can use to purchase individual health coverage and qualified expenses. This allows employers to control their budget and gives employees the freedom to choose their own health plan.

Can an employee use a Section 125 plan and an ICHRA together?

Yes, but only if the employee purchases an individual health insurance policy on an off-exchange marketplace.

Can a Section 125 plan pay for individual health insurance premiums?

Yes. A Section 125 premium-only plan can pay for individual premiums under specific conditions. When paired with an ICHRA, only pre-tax payroll deductions can go toward premiums for eligible off-exchange individual health insurance plans. Employees who enroll in an on-exchange plan through a public exchange, like the federal Health Insurance Marketplace or a state exchange, can't use a Section 125 cafeteria plan to pay for the portion of their premium that their ICHRA allowance doesn't cover.

Why don’t on-exchange health plans work with a Section 125 plan?

Because public exchanges already offer premium tax credits and other cost-sharing subsidies, federal law prohibits employees from using pre-tax salary reductions under a Section 125 cafeteria plan to pay on-exchange health insurance premiums. This prevents "double-dipping" tax advantages.

Can an ICHRA reimburse an employee’s entire health insurance premium payment?

This depends on the cost of the plan and the employer’s ICHRA allowance. Employers choose a set monthly allowance amount. If an employee's premium exceeds that allowance, they must pay the remaining balance unless they have access to another eligible payment method. If the plan’s cost is less than their allowance, then the ICHRA is essentially reimbursing the employee’s entire premium cost.

Can employers offer different ICHRA allowance amounts to different employees?

Yes. Employers can vary reimbursement amounts using eligible employee classes — such as full-time vs. part-time workers and salaried vs. hourly employees — as long as they adhere to federal ICHRA regulations and nondiscrimination rules. Within each class, they can also vary contributions by employee age and family size.

Does PeopleKeep administer Section 125 plans with an ICHRA?

No. PeopleKeep uses a reimbursement-based ICHRA model and therefore doesn't offer Section 125 premium-only payroll deductions. However, organizations that need this capability can do so with our parent company, Remodel Health. Contact Remodel Health or us to learn more about how our ICHRA administration solutions compare.

How do I choose the best individual health insurance plan?

The best plan depends on your preferred medical service providers, coverage network, prescription medications, household income, and budget. Having this information ready makes it easier to compare plans and choose coverage that’s right for you so you don’t miss out on necessary healthcare services.

Where can I get help comparing individual health insurance plans?

You can get help through public health insurance marketplaces, licensed insurance brokers, private health exchanges, and healthcare shopping platforms, such as Stride Health and GetInsured. If you have an HRA through PeopleKeep, you can shop for qualified health insurance from your PeopleKeep account. Our in-house benefits advisors are also available if you need help securing coverage for your healthcare needs.

Can I buy individual health insurance outside of Open Enrollment?

Yes, but only in certain circumstances. Outside of the annual Open Enrollment window, you may qualify for a special enrollment period to change or enroll in a new individual health plan if you have a qualifying life event. Eligible events include losing employer coverage, getting married, having a baby, or moving to a new state.

Can I use an HRA to pay for an individual health insurance plan?

Yes. If your employer offers a QSEHRA or an ICHRA and their HRA plan documents allow it, you can use your allowance to receive tax-free reimbursement for individual health insurance premiums and other eligible out-of-pocket expenses.

Is it better to buy health insurance through the Marketplace or a private exchange?

It depends on your situation. Public marketplaces allow eligible individuals to apply for federal premium tax credits and other subsidies that can lower the cost of their health insurance plan. On the other hand, private exchanges may offer additional enrollment support, plan comparison tools, and access to supplemental insurance products. There may also be a wider variety of off-exchange products specialized to your needs. However, you can’t apply for premium tax credits or other cost-sharing reductions on a private exchange.

Is a QSEHRA worth it for small businesses?

For many small businesses, yes, a QSEHRA is worth it. A qualified small employer HRA (QSEHRA) offers a predictable way to provide health benefits without the cost and complexity of traditional group health insurance. Employers set a monthly allowance that fits their budget, while employees choose their preferred individual health insurance plan.

What are some potential drawbacks to consider when thinking about offering a QSEHRA?

The main potential downside to a QSEHRA is the IRS annual contribution limit. Unlike an individual coverage HRA (ICHRA), employers can't give employees more than the IRS-set maximum limit. QSEHRAs also have fewer customization options for varying employee contributions.

Can employees choose any health insurance plan with a QSEHRA?

Yes. Employees can generally purchase any ACA-compliant individual health insurance plan that best meets their needs through a local exchange, the federal Health Insurance Marketplace, a private insurer, or a licensed insurance broker. However, employees must have a health plan that provides minimum essential coverage (MEC) to participate in the QSEHRA.

Who is eligible to offer a QSEHRA?

A QSEHRA is available to employers with fewer than 50 full-time equivalent employees (FTEs). You can’t offer a traditional group health plan or group ancillary benefits alongside the QSEHRA. Employers must also comply with IRS rules regarding reimbursement limits and employee eligibility.

Can a QSEHRA reimburse more than individual insurance premiums?

Yes. Employers can design the benefit to allow employee reimbursements for health insurance premiums only or for premiums plus other IRS-qualified out-of-pocket medical expenses. This includes deductibles, copays, over-the-counter drugs, prescription medications, and other eligible expenses.

Can I administer a QSEHRA myself?

While employers can self-administer a QSEHRA, doing so can be time-consuming and risk compliance penalties. Many employers use an HRA administrator, like PeopleKeep, to automate plan documents, review reimbursement requests, maintain required records, and help ensure compliance with IRS and HIPAA requirements.

How can employers reduce employee benefit costs without cutting benefits?

Employers can reduce benefit costs by offering more cost-controlled options, such as health reimbursement arrangements (HRAs), evaluating underutilized benefits, and consolidating multiple perks into flexible stipend programs. These strategies can help lower expenses while maintaining employee satisfaction.

How can an HRA help during a recession?

An HRA can help employers manage healthcare spending during economic uncertainty by providing predictable monthly costs and eliminating unexpected group health insurance renewal increases. This allows organizations to maintain valuable health benefits while protecting their budgets.

Is an HRA cheaper than traditional group health insurance?

For many employers, an HRA can be more affordable than traditional group health insurance because there are no minimum contribution requirements or participation requirements, and employers have complete control over their benefit budget by using a defined contribution model. Actual savings depend on company size, employee demographics, and benefit design.

Can an HRA replace group health insurance?

Yes. A qualified small employer HRA (QSEHRA) or individual coverage HRA (ICHRA) can serve as an alternative to traditional group health insurance. Employees use the benefit to purchase their own qualifying individual health coverage and receive tax-free reimbursements from their employer for premiums and out-of-pocket medical costs.

What employee benefits do workers value most during economic uncertainty?

Health insurance, healthcare benefits, retirement savings programs, paid time off, flexible work arrangements, and long-term disability insurance are consistently among the most valued employee benefits. During periods of economic uncertainty, benefits that help employees manage healthcare, living, and household expenses become even more important.

Elizabeth Walker

Elizabeth Walker is a content marketing specialist at Remodel Health and PeopleKeep. Since starting with the company in April 2021, she has become well-versed in writing about HRAs, health benefits, and small business solutions. Outside of her expertise in the healthcare benefits industry, Elizabeth has been a writer for more than 20 years and has written several poems and short stories. She's published two children’s books in 2019 and 2021, which she is developing into a series of collected works. Her educational background as a classical musician and love of the arts continue to inspire her writing and strengthen her ability to be creative.

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