Small business health insurance in Georgia

Overview of small business health insurance in Georgia

For small business owners in Georgia, ensuring employees have access to quality health insurance coverage is paramount. Quality health insurance is more than a benefit; it shows employees you’re invested in their well-being and helps them sustain a positive work environment.

Small employers in Georgia can select from various health insurance options like health maintenance organizations (HMOs), preferred provider organizations (PPOs), exclusive provider organizations (EPOs), and point of service (POS) plans.

But, not every organization can afford to offer its employees a group plan, or it may not meet the plan’s minimum participation requirements. Thankfully, there's also flexibility in funding employee health plans through defined contribution strategies, such as health reimbursement arrangements (HRAs), allowing employers to control costs while reimbursing employees for individual health insurance premiums.

For employers and eligible employees, understanding the array of affordable options is essential for making informed decisions about health insurance benefits. This, in turn, can help in managing monthly health benefits costs.

Importance of small business health insurance

For small businesses in Georgia, offering health insurance isn’t merely an operational cost but a strategic investment in the company's most valuable asset—its workforce. We’ll review the most important reasons for offering health benefits to your employees.

The employer mandate

In Georgia, federal regulations impact the employer-provided health insurance landscape. Although there’s no state-specific mandate requiring businesses to provide health insurance, the Affordable Care Act (ACA) established the employer mandate on a national level. This mandate requires organizations with 50 or more full-time equivalent employees (FTEs) to offer affordable health benefits that meet minimum essential coverage (MEC) and minimum value standards or face potential penalties.

Organizations with 50 or more FTEs are known as applicable large employers (ALEs). These organizations face steep penalties if they don’t offer coverage to at least 95% of their full-time employees or if at least one employee gets a tax subsidy on the individual health insurance market.

Small businesses and nonprofits in Georgia with fewer than 50 FTEs don’t need to offer health coverage. However, the absence of such benefits could significantly hinder a company's ability to attract and retain top-quality staff.

Benefits of providing health insurance to employees

Offering health insurance to employees comes with various benefits that extend beyond compliance with the employer mandate.

Providing your employees with health benefits can offer numerous advantages to you and your workforce, including the following:

• Attract and retain qualified employees
• Tax advantages
• Improved wellness and productivity

First and foremost, health insurance is pivotal in fostering job satisfaction and nurturing a loyal employee base. This loyalty translates to reduced turnover—a benefit that can considerably decrease costs related to hiring and training replacements.

It can also help you attract talented employees. Including health benefits in your compensation package allows you to better attract skilled and motivated individuals who are more likely to stay with a company that invests in them.

According to our 2024 Employee Benefits Survey, 81% of employees said an employer’s benefits package is an important factor in whether or not they accept a job with the organization. Additionally, 92% of employees rated health benefits as either somewhat or very important.

From a productivity standpoint, employees with health insurance are less preoccupied with worries about unforeseen medical expenses or taking time off from work because they are ill. This enables them to channel their focus and energy into their work. This increased concentration and commitment often leads to enhanced engagement and efficiency within the workplace.

Small business health insurance options in Georgia

Small businesses and nonprofits face unique challenges when providing health insurance to their employees. Understanding the different types of small business health insurance plans in Georgia can help business owners make informed decisions that benefit their employees and bottom line.

Some of the options available to small businesses include:

• Traditional group health insurance
• Health reimbursement arrangements (HRAs)
• Health stipends
• Supplemental benefits, like dental and vision insurance, health savings accounts (HSAs), and flexible spending accounts (FSAs)

Group health insurance in Georgia

Traditional group plans have been the standard choice for organizations of all sizes for decades. With this type of plan, the employer typically purchases a group policy from an insurance carrier and shares the cost of coverage with their employees, with the employer covering a larger portion of the monthly premiums. You can also extend coverage to employees’ spouses and dependents.

Given the variety of comprehensive coverage options available, employers in Georgia need to assess the group health plans various insurance companies offer.

There are four main types of group plans in Georgia:

• Preferred provider organization plans (PPOs): A PPO is historically the most common type of plan. They give their policyholders a network of preferred healthcare providers they contract with to provide care at a lower price. Members can seek care outside of their network but at a much higher cost.
• Health maintenance organization plans (HMOs): HMO plans offer a wide range of healthcare services through a network of providers that either contract exclusively with the HMO or agree to provide services to members. Members must select a primary care physician (PCP) and get referrals to see a specialist.
• Exclusive provider organization plans (EPOs): An EPO combines the network of preferred providers of an HMO with the freedom of seeing a specialist without a referral that a PPO offers. These plans don’t cover care from out-of-network providers.
• Point of service plans (POSs): With a POS plan, you pay less if you see in-network doctors. Like an HMO, you must get a referral from a primary care doctor to see a specialist.

The plan that’s best for you and your employees depends on what you want and how much you’re willing to spend.

For larger organizations, group health coverage provides members with cheaper monthly insurance premiums because the plan spreads the risk of insuring its members across the entire group. These plans generally require 70% of your employees to opt into coverage. Otherwise, you won’t meet the minimum participation requirements and, therefore, can’t offer the plan. The more members you have, the more you can spread risk across the organization, reducing costs.

Employers and employees split the cost of premiums. According to KFF, on average, employers covered 83% of their employees’ self-only premiums and 72% of family insurance premiums in 2023.

While these plans are the standard option, they come with high costs, especially for small groups. Many small organizations can’t afford to offer a group plan to their employees. They also may not meet the minimum participation requirements, leaving them without a health benefit.

Suppose a standard group plan is too expensive for your organization. In that case, you can offset some of the cost with a high deductible health plan (HDHP). These plans have lower premiums but higher deductibles, which is how much your employees must pay before the insurance company begins to pay a portion of their costs. So, while these plans offer cost savings for the employer, they can cost employees more.

A simple solution to this is offering a group coverage HRA (GCHRA), also called an integrated HRA. This allows you to reimburse your employees tax-free for their qualifying out-of-pocket medical expenses, such as costs they incur before they meet their deductible. A GCHRA helps you offset the additional burden on your employees, contributing to greater cost savings for you and your team.

You can also get small group health insurance plans through the Small Business Health Options Program (SHOP) marketplaces. These plans, which are available to organizations with fewer than 50 FTEs, can be cheaper than non-SHOP plans for small businesses. Those with fewer than 25 employees whose average annual employee salary is less than $56,000 may also qualify for the Small Business Health Care Tax Credit.

The following companies offer small group health plans in Georgia in 2024, according to HealthCare.gov’s rate review site.

The table below shows Georgia’s lowest possible monthly SHOP premiums per employee.

Taking advantage of individual health insurance with an HRA

Group health insurance is expensive and doesn’t provide employers or employees with the flexibility they need to satisfy their needs. Thankfully, employers aren’t stuck with a one-size-fits-all traditional group plan. Health reimbursement arrangements (HRAs) present a flexible and advantageous method for small businesses in Georgia to offer health benefits.

HRAs allow employers to reimburse their employees tax-free for qualifying out-of-pocket medical expenses and, depending on the type of HRA they offer, individual health insurance premiums. Employees can select individual health plans that best fit their personal needs, giving them control over their health insurance decisions.

Employers save money by not buying a group plan. Instead, they offer a fixed monthly allowance that fits their budget. There's no requirement for minimum contributions or advance commitments, and HRAs don’t require employers to pre-fund an account—it's a pay-as-you-go system, with employers disbursing funds only when employees submit qualified medical expense receipts for reimbursement.

Offering an HRA is especially advantageous in Georgia because small group health insurance is more expensive in most counties than individual insurance premiums.

Here’s a look at monthly small group health insurance rates compared to individual health insurance premiums in Georgia’s most populous counties, according to Ideon.

With savings of up to 34% on silver-level individual plan premiums compared to small group plans, you and your employees can save money with a marketplace plan. These plans offer MEC and cover the ACA-mandated essential health benefits. You can then reimburse your employees for their premiums through an HRA.

Two types of HRAs that allow you to reimburse employees for their insurance premiums are:

• The qualified small employer HRA (QSEHRA): The QSEHRA allows organizations with fewer than 50 FTEs to reimburse their employees tax-free for qualifying out-of-pocket expenses and insurance premiums. The IRS caps maximum allowances and adjusts this limit annually.
• The individual coverage HRA (ICHRA): The ICHRA is available to organizations of all sizes. It works like a QSEHRA but has more flexibility and customization options. There’s no maximum contribution limit, so you can offer your workers more than you can with a QSEHRA. You can also differ allowances and customize eligibility with 11 employee classes. The ICHRA is a great choice for organizations looking to satisfy the employer mandate while saving time and money over group coverage.

Health stipends

Health stipends offer small businesses in Georgia a method to give employees a sum of money or reimburse employees for health-related expenses. This approach gives small businesses the benefit of predictable budgets and hands-off management while providing employees with additional monetary support for their healthcare costs. They can also provide support for medical expenses and general wellness costs that HRAs and group plans don’t cover.

But stipends have disadvantages. The IRS considers stipends taxable income, and you can’t ask for proof of insurance or for any receipts for items or services listed in IRS Publication 502. Stipends also can’t satisfy the ACA’s employer mandate for ALEs. This makes HRAs a better option for most organizations.

Supplemental benefits

Offering supplemental benefits, also called ancillary benefits, alongside primary health plans strengthens the overall benefits package available to employees. These benefits provide coverage for specific services and situations—such as emergency room care, hospitalization, and prescription drugs—that health insurance may not cover.

Some of the most common types of supplement health benefits include the following:

• Critical illness insurance: This provides coverage for medical emergencies regular insurance may not fully cover, such as cancer, stroke, and kidney failure. It provides a lump sum to cover medical bills or lost wages.
• Vision insurance: Most major medical plans don’t cover or fully cover vision expenses for adults, like prescription glasses, contact lenses, or eye exams. Supplemental vision coverage can help your workers get the eye care they need. An HRA can also reimburse employees for these expenses.
• Dental coverage: Like vision coverage, most group and individual medical plans don’t cover adult dental care. Offering dental insurance can help your employees pay for exams, fillings, and more. An HRA can also reimburse employees for these expenses.
• Health savings account (HSA): An HSA is an employee-owned account you and your employees can contribute to. Employees can then use their HSA funds to pay for future medical expenses. HSAs require HSA-qualified health insurance plans. Many group and individual high deducible plans meet IRS requirements.
• Flexible spending account (FSA): A healthcare FSA allows you to help pay for your employees’ out-of-pocket medical expenses. It covers many of the same items as an HRA, except for insurance premiums.

Average cost of health insurance in Georgia

Several factors influence the average cost of health insurance in Georgia. The cost of group and individual plans varies depending on factors like age, location in the state (rating areas), and the plan’s actuarial value.

According to KFF’s 2023 Employer Health Benefits Survey, the average annual premium in the U.S. was $8,435 for single coverage and $23,968 for family coverage. While the cost of a group plan will vary significantly depending on which plan you offer, individual insurance is cheaper in every county in Georgia, as demonstrated in the table above.

The table below shows the lowest-cost premiums for each metal tier on average for a 40-year-old on HealthCare.gov in Georgia, according to KFF.

The cost of individual plans differs by age, location, the insurance company, and the metallic tier of coverage. Bronze plans have lower monthly premiums on average than silver or gold plans but have higher deductibles. There are also plan options like catastrophic plans that can save your employees money on premiums if they qualify.

What plans are available on the individual market in Georgia?

Individuals and families in Georgia looking for health insurance coverage have a variety of options to choose from on the individual market. Currently, residents should use the federal Health Insurance Marketplace at HealthCare.gov to find a plan. However, Georgia is transitioning to a state-based exchange, Georgia Access, for open enrollment 2025.

The following are insurance carriers offering individual plans in the state.

All table data from HealthCare.gov’s rate review site.

The availability of these plans depends on the county in which you reside. Open enrollment in Georgia runs from November 1 through January 15.

Individuals and families with marketplace plans may be eligible for federal premium tax credits. During 2023 open enrollment, 93% of Georgians enrolled in the exchange received these premium tax credit subsidies. While the IRS typically determines eligibility for these tax credits using federal poverty guidelines, the Inflation Reduction Act removed the upper income limit through 2025. Now, anyone can access these credits if their premiums exceed 8.5% of their household income.

COBRA in Georgia

In Georgia, the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is a vital safeguard for individuals who have left their employment, allowing them to retain their group health insurance coverage for a defined period. Those eligible for COBRA, including employees and their dependents, can continue the same medical plans they enjoyed while employed.

All organizations with 20 or more FTEs must offer COBRA under federal law. Georgia has its own mini-COBRA law that requires employers with fewer than 20 employees to continue providing health benefits to employees and qualifying dependents for three months.

It's important to note that all monthly payments under COBRA are the responsibility of the individual, encompassing both the employee's and employer's portion of contributions, in addition to a small administrative charge. While COBRA ensures continuity in health insurance benefits, this could increase healthcare costs for the individual. For most individuals, securing a new plan on the individual marketplace is likely cheaper than COBRA.

How PeopleKeep can help Georgia employers

If you’re ready to offer flexible, personalized health benefits to your employees in Georgia, PeopleKeep can help. Our HRA administration platform makes it easy for organizations of all sizes to set up and manage their health benefits in minutes each month.

With PeopleKeep, businesses design HRAs that meet their specific needs and budget, providing employees with the flexibility to choose the healthcare options that work best for them. This customization capability allows businesses to control costs and ensures that employees receive the coverage they need.

We even review your employees’ reimbursement requests for you, saving you time and ensuring compliance with ACA, ERISA, and IRS regulations. By simplifying benefits administration, PeopleKeep saves businesses valuable time and resources, allowing them to focus on their operations.