As an owner of a small or growing trucking company, you want to provide the best health benefits to your employees and their families. And yet for many companies, traditional employer health insurance has become too expensive or simply does not meet the unique needs of a mobile and diverse workforce. As such, trucking companies nationwide are evaluating health insurance options including individual health insurance reimbursement benefits.
Individual health insurance reimbursement is a cost effective solution - but it is a shift in how we think about health benefits. Instead of the company providing an insurance policy to employees, the employees choose their own insurance and get to keep it even if they switch jobs. As such, it is natural to have questions about how it works for your company and employees.
To help, this article answers the top five frequently asked questions about transitioning to individual health insurance reimbursement.
Q. How does individual health insurance reimbursement work?
A. With this health benefits approach, your trucking company sets up a health reimbursement plan to give employees a healthcare allowance. For compliance reasons, and for easy administration, most companies use third-party software to help set up and manage the plan.
Here’s how it generally works.
- The company sets monthly healthcare allowances.
- Employees purchase their own health plan.
- Employees submit a reimbursement request online.
- The expense is substantiated (usually by a third party).
- The company reimburses employees for the approved expense via payroll, check, or direct deposit.
A small business owner can use their health insurance reimbursement plan to reimburse employees in multiple states, making this health benefit a great solution for trucking companies with mobile and widespread workforces.
Q. How much time will it take the company to administer?
A. Once implemented, the benefit program should only take 5 minutes per month to administer online. Companies use software to set up the plan, enroll and educate employees, ensure compliance, and add approved reimbursements to payroll.
Q. Is a reimbursement plan considered health insurance?
A. No. A reimbursement plan is not health insurance. Rather, the plan is a Self-insured Medical Reimbursement Plans, also called a Healthcare Reimbursement Plan (HRP).
Q. How does it work for employees?
A. Employees select and purchase an individual health policy that best fits their families' needs, choosing any plan, from any carrier. Employees may use their healthcare allowance to be reimbursed for eligible premium expenses. They can keep their same network and doctors, and pick a coverage level that fits their health needs. Individual health plans cost, on average, 20-60 percent less than traditional group plans, and federal tax credits may be available to qualifying employees.
Q. Where do employees purchase insurance?
A. Employees may purchase insurance through a licensed health insurance agent (who is appointed to represent the insurance carriers), online, or through your state’s Health Insurance Marketplace. Employees are no longer asked medical history information on the application, and cannot be denied or charged more because of a pre-existing condition. Many companies also find it helpful to have a licensed health insurance agent help employees navigate plan choices.
As trucking companies research how to offer affordable, competitive health benefits it is common to evaluate transitioning employees to an individual health insurance reimbursement program. We hope this article has answered your questions about how it works, how employees purchase insurance, and how reimbursement software can make the transition seamless.
What additional questions do you have? We’d be happy to help. Leave a comment or question below.