Small business health insurance in Maine

Health insurance is a critical component of employee benefits. It ensures compliance with state and federal laws and enhances your reputation as an employer of choice.

Let's review why providing health benefits to your employees in Maine is essential.

The ACA’s employer mandate

Under the Affordable Care Act (ACA), employers with 50 or more full-time equivalent employees (FTEs) must offer affordable health insurance that meets minimum essential coverage (MEC) and minimum value (MV) criteria. This is known as the employer mandate.

Employers in Maine with 50 or more FTEs, known as applicable large employers (ALEs), may face tax penalties if both conditions are met:

• They don't provide health insurance coverage to at least 95% of their full-time employees and their dependents.
• Any of those employees gets subsidies on the individual health insurance market.

Additionally, ALEs can face a penalty for not offering MV or affordable coverage if at least one employee gets a subsidy for an individual market plan.

Perks of providing health insurance to employees

Employers with fewer than 50 FTEs aren't required by law to offer health insurance coverage. However, there are several reasons to consider offering employee health benefits.

The advantages of offering health insurance to your employees include:

• Tax benefits
• Improved recruitment and retention
• Increased productivity
• Decreased absenteeism due to preventable health conditions and illnesses
• Improved health outcomes

If you want to catch the eyes of job seekers, you need to offer employee health benefits. Our 2024 Employee Benefits Survey found that 81% of employees consider an employer’s benefits package an important factor when deciding whether to accept a job offer. Another 92% of employees rated health benefits as important. If you fail to offer health coverage, you may fall behind your competitors.

Running a small business comes with distinct challenges, especially when it comes to health insurance. Unlike larger companies with hefty budgets and specialized teams for benefits management, small business owners must carefully balance their time and resources. You need to evaluate your health insurance options meticulously and make well-informed choices.

Here's how small employers can offer health coverage to their employees:

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

Group health insurance plans in Maine

Most business owners use traditional group health insurance plans to provide coverage. First, let’s cover fully-insured group plans. With these plans, employers share the cost of premiums with their employees, and usually cover a larger portion of the expenses. Additionally, employers have the option to include spouses and children in the coverage, greatly increasing the overall value of the benefits provided to their staff.

Here are the types of group health insurance plans available in Maine:

• Preferred provider organization plans (PPOs): PPOs are the most common health plan choice. Members have access to a network of healthcare providers, but they can also receive services outside this network for an additional fee.
• Health maintenance organization plans (HMOs): HMOs provide comprehensive healthcare services through established provider networks. Members need to pick a primary care physician (PCP) to manage their healthcare needs. Their PCP issues referrals for specialist consultations when needed.
• Exclusive provider organization plans (EPOs): EPOs share characteristics with HMOs and PPOs. An EPO gives members access to a specific network of providers. Members can also directly consult specialists without needing referrals. However, care from providers outside the network isn't covered under an EPO.
• Point of service plans (POSs): POS plans provide cost-effective rates for visits to in-network doctors while also covering services out-of-network. Like HMOs, members need referrals from their PCPs to see specialists.

Larger employers usually get better rates on group health plans since they distribute risk across a more extensive employee base. They also benefit from the shared financial responsibility for premium costs. According to KFF², employers typically cover 83% of premiums for individual plans and 72% for family plans. In addition, you need about 70% of your workforce to participate if you want to qualify for a group plan.

To save money, you can consider using a high deductible health plan (HDHP). An HDHP offers cost savings by reducing monthly premium costs for employers and employees alike.

However, as the name implies, HDHPs have high deductibles. This means your employees have to pay for more out-of-pocket expenses before their coverage kicks in.

To avoid higher costs for your team, you can pair an HDHP with a group coverage HRA (GCHRA). With a GCHRA, or integrated HRA, you can provide tax-free reimbursements to your employees for their out-of-pocket expenses, such as deductibles.

Small businesses with fewer than 50 FTEs can secure small business health insurance by working with a broker or a health insurance company directly. Additionally, if your business has fewer than 25 employees, each earning an average annual wage below $50,000, you may qualify for the Small Business Health Care Tax Credit.

These are the companies providing small group health plans in Maine for 2026, as listed on HealthCare.gov's rate review website³:

There are also self-funded group plans. With this type of plan, employers directly insure their employees and pay out medical claims according to their plan documents. While small employers can save money on premiums, self-insuring comes with a lot of risk. This is because any substantial or unexpected medical claims can cause budget instability. Employers can mitigate their risk by buying a stop-loss policy. But these can be expensive.

How to take advantage of individual health insurance with an HRA

If cost or employee count is a concern for your small business, consider an alternative health benefit. Rather than opting for a traditional group health plan, you can provide a stand-alone HRA to your team. An HRA allows you to offer cost-effective health coverage by reimbursing employees for their individual health insurance premiums.

You can reimburse more than 200 eligible expenses with an HRA, including:

• Monthly premiums for health, vision, and dental plans
• Dental and vision expenses
• Preventive care
• Emergency care
• Prescription drugs
• Over-the-counter medication

Two of the most popular HRAs are:

• The individual coverage HRA (ICHRA): The ICHRA works for employers of all sizes. It's particularly helpful for ALEs since it can satisfy the employer mandate. Employers can offer employees as much as they want as allowances since there's no annual limit on contributions. You can also vary allowances using 11 employee classes, employee age, and family size. Employees need their own individual health insurance policies to participate in the ICHRA.
• The qualified small employer HRA (QSEHRA): The QSEHRA is only for small employers with fewer than 50 FTEs. It also has annual limits on employer contributions. You can't vary allowances using employee classes, but you can still offer different allowance amounts based on an employee's age and family size. Unlike the ICHRA, employees only need health plans that provide MEC to participate in the QSEHRA. This means they can participate if they're on a spouse's or parent's health plan.

Ready to offer an affordable and flexible health benefit to your team? PeopleKeep by Remodel Health can help make it happen. Our HRA administration software streamlines the process to save you valuable time and resources.

Here’s how providing an HRA with PeopleKeep works:

• You offer your employees an ICHRA, QSEHRA, or GCHRA.
• You set a monthly allowance amount for them to spend on medical expenses.
• With an ICHRA or QSEHRA, your employees purchase health plans and other essentials using their own money.
• Your employees submit their eligible expenses for reimbursement through their PeopleKeep account.
• We approve their expenses.
• You reimburse them up to their allowance amounts. Any unused HRA funds stay with you at the end of the year.

We also assist with several time-consuming tasks, such as:

• Reviewing reimbursement requests from your employees. We ensure they follow ACA, ERISA, and IRS regulations. This also keeps protected health information (PHI) safe to prevent your organization from any HIPAA violations.
• Generating legal plan documents and summary plan descriptions on your behalf.
• Answering any questions you may have by providing award-winning customer support.

We also help your employees find the health insurance plans that work best for them. After enrolling in their ICHRA or QSEHRA, they can easily shop for coverage directly from their PeopleKeep dashboard.

If you prefer to work with a broker, you still can. Your broker can sell individual health insurance policies to your employees and assist you in managing your benefits. Have your broker reach out to us to learn more about setting up an HRA for your team.

For organizations with 50 or more employees that want additional compliance tools and hands-on support, Remodel Health’s ICHRA+ administration solution delivers a white-glove experience.