Small business health insurance in Iowa

Group health insurance plans in Iowa

Since the end of World War II, business owners have relied on traditional group health insurance plans for coverage. In a fully-insured group plan, both the company and its employees typically pay the premiums, with the employer taking on a larger share of the expenses.

With a group plan, employers can also extend coverage to employees' spouses and children, enhancing the benefits offered to their workforce.

In Iowa, group health insurance plans are available in various forms, such as:

• Preferred provider organization plans (PPOs): PPOs are the most common type of health plan. PPO members have a network of healthcare providers, with the flexibility to receive care from outside that network at a higher cost.
• Health maintenance organization plans (HMOs): HMOs provide a comprehensive array of healthcare services through established provider networks. In an HMO, members must choose primary care physicians (PCPs). Their PCP manages their healthcare needs and refers them to specialists when needed.
• Exclusive provider organization plans (EPOs): EPOs combine elements of HMOs and PPOs. EPO members can access services from a specific network of providers and visit specialists directly without referrals. But an EPO won't cover any care members receive from out-of-network providers.
• Point of service plans (POSs): POSs provide lower costs for in-network doctor visits while also covering out-of-network care. Like an HMO, members must obtain referrals from their PCPs before seeing specialists.

Large companies tend to secure better rates on group health insurance because they spread the risk over a broader pool of employees. They also gain from sharing the cost of premiums.

KFF data shows employers cover about 83% of the premiums for individual plans and around 72% for family plans. You also need about 70% of your employees to participate to qualify for a group health plan.

If a traditional group health plan is out of your budget, a high deductible health plan (HDHP) may be the way to go. An HDHP can provide potential savings by lowering the monthly premium expenses for both employers and employees.

The drawback of HDHPs is their high deductibles. This means your employees will have to cover more out-of-pocket expenses before the insurance kicks in, which can potentially increase costs for your team.

In this scenario, you can offer a group coverage HRA (GCHRA), sometimes referred to as an integrated HRA, alongside your HDHP. With a GCHRA, you can provide tax-free reimbursements to your employees for their out-of-pocket expenses, such as deductibles.

Iowa employers with fewer than 50 FTEs can access small business health insurance plans through a broker or a health insurance carrier. If you have fewer than 25 employees who earn less than $50,000 annually, you may qualify for the Small Business Health Care Tax Credit.

The following companies offer small group health plans in Iowa in 2025, according to HealthCare.gov’s rate review website³:

How to take advantage of individual health insurance with an HRA

If a group plan is too costly or you don't have enough employees to qualify, there's a better health benefit for your small business.

Instead of opting for a traditional group health plan, you can go with a stand-alone HRA. HRAs allow you to provide affordable health coverage to your employees by reimbursing them for their individual health insurance premiums.

There are several individual healthcare costs you can reimburse, such as:

• Monthly premiums for health, vision, and dental plans
• Doctor appointments
• Preventive services
• Emergency care
• Dental costs
• Vision costs
• Prescription drugs
• Over-the-counter medication
• Mental health services

Two of the most popular HRAs are:

• The individual coverage HRA (ICHRA): This ICHRA gives employers the most flexibility. With no annual limits on employer contributions, you can offer your workers as much as you want as an allowance. You can also offer different allowances using 11 employee classes, such as full-time and part-time workers, and family status. Additionally, the ICHRA is a great solution for ALEs that need to satisfy the employer mandate. Eligible employees need their own individual health insurance plans to participate in the ICHRA.
• The qualified small employer HRA (QSEHRA): Unlike the ICHRA, the QSEHRA is only for small businesses with fewer than 50 FTEs. This makes it an excellent option for organizations that want to provide benefits for the first time or lower their premium costs. However, it's not as flexible as the ICHRA. It comes with annual contribution limits. It also doesn't have employee classes, but you can vary allowances based on an employee's age and family size. Eligible employees need health plans that provide MEC to participate. This means they can participate if they're on a spouse's or parent's health plan.

Ancillary and supplemental plans

While health insurance is an important employee benefit, it's just the beginning. To better support the overall well-being of your employees, you should consider offering ancillary benefits. These additional benefits create a more well-rounded benefits package.

Here are some ancillary and supplemental health benefits you can offer:

• Dental coverage: Medical plans don't usually offer adult dental care. If you offer dental insurance as an extra perk, you can help your employees out with the extra cost for things like exams, cleanings, or fillings. You can also use an HRA to reimburse your employees for their dental bills and dental plan premiums.
• Vision insurance: Like dental care, traditional health plans don't often cover vision care, leaving employees to cover eye exams and lenses themselves. By adding vision coverage or using an HRA, you can help with these costs and also reimburse vision plan premiums.
• Health savings account (HSA): An HSA is an employee-owned account that allows both you and your employees to contribute pre-tax funds. Your employees can access their HSAs whenever they need to pay for upcoming medical expenses.
• Flexible spending account (FSA): Just like an HSA, a healthcare FSA helps your employees cover out-of-pocket costs when they need medical care. It includes most of what an HRA does, but doesn't include health insurance premiums for reimbursement.
• Critical illness insurance: Critical illness insurance offers protection for serious conditions like cancer, stroke, or kidney failure. It offers employees a lump-sum payout to handle medical costs or lost wages during recovery.