Offering health insurance is a major decision for employers, but it can be overwhelming to know where to start, especially for small businesses without a full HR staff to help.
However, putting in the time and research to set up a formal health benefit is well worth the effort. There are several advantages to offering an employer-sponsored health insurance plan to help retain and attract employees, help your business stand out, and build a happy and healthy workforce.
Understanding which health insurance companies are credible with a wide range of products and providers is a good place to start. Below are the top 25 health insurance companies in the United States listed by size of market share in descending order. This list is a great place to start your research on your way to providing great health benefits.
Top 25 U.S. health insurance companies listed by market share
- United Health
- Kaiser Foundation
- Anthem Inc
- Centene Corporation
- Health Care Service Corporation (HCSC)
- Molina Healthcare
- Independence Health Group
- Guidewell Mutual Holding
- California Physicians Service
- Highmark Group
- Blue Cross Blue Shield of Michigan
- Blue Cross of California
- Blue Cross Blue Shield of New Jersey
- UPMC Health System
- Health Net of California
- Carefirst Inc.
- Blue Cross Blue Shield of North Carolina
- Local Initiative Health Authority
- Blue Cross Blue Shield of Massachusetts
- Blue Cross Blue Shield of Tennessee
To clarify, size of market share does not necessarily correlate with quality of product or service, nor does it guarantee the company will retain its position through the entire year. This list reflects data gathered through the end of 2020. If you're shopping for an individual health insurance policy, we recommend visiting our partner, KindHealth, to help you find one.
Health insurance companies win big profits from consumers
According to the NAIC Health Insurance Report, in 2020, U.S. health insurers earned approximately $816.2 billion in net premiums. Compared to 2019, there was a 11% increase in premium spending from U.S. consumers.
With premium prices on the rise, it can be hard to budget for a group health insurance plan. However, there are now more options for small to medium sized businesses that can’t afford a group health insurance plan. Health reimbursement arrangements (HRAs) are one of those options.
Why health reimbursement arrangements are a better option for small employers
An HRA is a health benefit used to reimburse employees, tax-free, for out-of-pocket medical expenses and health insurance premiums. Employers are able to manage their budget by setting an allowance and give their employees more flexibility and freedom over their health benefit to best suit their needs.
PeopleKeep offers an HRA administration software for businesses of all sizes looking to administer their HRA benefits quickly and easily. It enables employers to provide a simple, effective solution to manage the benefit while we focus on the details like documentation review and compliance.
If you're looking for an alternative to expensive group health insurance policies, an HRA enables your employees to choose a policy that best fits their needs. Below are three types of HRAs that PeopleKeep offers that might be right for you.
Qualified small employer HRA
A qualified small employer health reimbursement arrangement (QSEHRA) is a health benefit for employers with fewer than 50 full-time equivalent employees. Employers can set an allowance that works for their budget and employees can pick an insurance policy that works best for them and buy what fits their personal medical needs.
The allowance is flexible and can be used to receive tax-free reimbursements for health insurance premiums and other out-of-pocket medical expenses. Use our interactive expense tool which includes the full list of reimbursable expenses under IRS Publication 502.
Individual coverage HRA
Similar to the QSEHRA, the individual coverage HRA (ICHRA) is a health benefit that can be used to reimburse employees tax-free for individual health insurance premiums and other medical expenses. However, it is available for employers of all sizes and it is able to be used by itself or in conjunction with group health insurance.
If they choose, employers can set different allowance amounts by family status making the ICHRA customizable. All employees need to do is decide whether to opt in or opt out of the benefit before it starts and attest at the beginning of each month that they are still covered by individual health insurance.
Group coverage HRA
The group coverage HRA (GCHRA) is for small to midsize employers offering a group health insurance plan who want to supplement their benefit alongside traditional insurance. Similar to QSEHRA and ICHRA, it’s a tax-free reimbursement method for employers that want greater control over their health benefits costs.
In addition to setting an allowance, the GCHRA also gives employers the ability to set a deductible amount and choose a percentage that employees are responsible for paying. Employees can then begin receiving reimbursements for approved out-of-pocket expenses that are fully paid for by the group health insurance plan.
Not sure which HRA fits your organization's needs best? Take our quiz
While health insurance companies continue to dominate the market, small employers may get more benefit for their business by offering an HRA. For small businesses, HRAs are an easy way for you to start offering health benefits without having to dive head-first into the waters of group plan administration while giving your employees the opportunity to choose the health plan that is right for them.
If you are a small business owner thinking about getting an HRA for your employees, we would love to help you get started. Schedule a call with a personalized benefits advisor at PeopleKeep and we will get you on your way.
This article was originally published on January 13, 2020. It was last updated September 27, 2021.