Small business health insurance in Oregon

Oregon small business health insurance information

If you’re a small business owner running a company in The Beaver State, your compensation package should include a variety of perks—including health insurance. There are several health benefit options in Oregon, but they’re not all created equally. Choosing a health insurance benefit that can meet your diverse staff's needs while not breaking your budget is critical to your company’s success.

The following guide to small business health insurance in Oregon will discuss the importance of offering coverage at your company, available options, expected costs, and more. We’ll also share health benefit alternatives to traditional group health insurance that can provide you with greater flexibility and extra savings.

Topics covered in this guide include:

1. Overview of small business health insurance in Oregon
2. Importance of small business health insurance
3. Small business health insurance in Oregon
4. Average cost of health insurance in Oregon
5. What plans are available on the individual market in Oregon?
6. COBRA in Oregon
7. How PeopleKeep can help

Importance of small business health insurance

Small Oregon employers shouldn’t consider offering health insurance coverage a costly burden. Instead, it’s an investment in your greatest asset—your workers. Below, we’ll discuss the top reasons for providing your employees with health benefits.

The employer mandate

There’s no state law requiring Oregon employers to offer health insurance. But there’s a federal requirement. Under the Affordable Care Act’s employer mandate, organizations in Oregon with 50 or more full-time equivalent employees (FTEs) must offer affordable health benefits that meet minimum essential coverage (MEC) and minimum value standards.

Also known as applicable large employers (ALEs), these organizations face costly penalties if they fail to offer coverage to at least 95% of their full-time employees, and at least one employee gets a tax subsidy on the individual health insurance market.

Small businesses and nonprofits in Oregon with fewer than 50 FTEs don’t have to offer health insurance. However, providing health benefits is a great way to entice workers to your organization and retain them.

Benefits of providing health insurance to employees

Whether or not your company must comply with the employer mandate, offering health insurance to employees has many other benefits.

The following are a few advantages of providing your staff with health benefits:

• It helps you attract and keep qualified workers.
• It has tax advantages for you and your employees.
• It improves job satisfaction, morale, and productivity.
• It showcases your company as an employer of choice and keeps you competitive.

Our 2024 Employee Benefits Survey found that 81% of employees said an employer’s benefits package is an important factor in whether they accept a job with the organization. Additionally, 92% of employees rated health benefits as somewhat or very important. Because it’s a highly-rated benefit, offering health insurance is a great way to improve loyalty, reduce turnover, and entice qualified candidates to your workplace.

Lastly, employees who have comprehensive health insurance take fewer sick days and are more productive at work. They can seek preventive care and experience fewer illnesses when they have affordable access to medical. In turn, this makes them more engaged and efficient at work, which benefits your bottom line and keeps your staff healthy.

Small business health insurance options in Oregon

Due to cost and limited resources, small businesses have unique challenges when providing health insurance to their employees. Understanding the different types of small business health benefit options in Oregon can help employers make the right choice for themselves and their workers.

Some of the options available to small businesses include:

• Traditional group health insurance
• Health reimbursement arrangements (HRAs)
• Health stipends
• Association health plans
• Supplemental benefits

Group health insurance in Oregon

Traditional group plans have remained the most popular choice for employers for years. With this type of plan, the employer purchases a group policy from an insurance carrier. They then split the cost of coverage with their employees. The employer typically covers a larger part of the premium cost. Employee spouses and dependents can also join the group policy.

If you select a group policy in Oregon, your plan can be any of the following types:

1. Preferred provider organization plans (PPOs): As the most common type of plan available, PPOs contract with a network of preferred providers to offer care to their members at a lower price. Members can go out-of-network at a higher cost.
2. Health maintenance organization plans (HMOs): HMO plans contract exclusively with a network of providers that agree to provide medical services to members. Members must select a primary care physician (PCP) and get referrals to see a specialist.
3. Exclusive provider organization plans (EPOs): An EPO combines the network of preferred providers of an HMO with the ability to visit a specialist without a referral like a PPO. EPOs don’t cover out-of-network care.
4. Point-of-service plans (POSs): With a POS plan, employees pay less when they see in-network doctors. However, they must get a referral from a primary care physician to see a specialist.

In an ideal scenario, group health policies can provide employees with cheaper monthly premiums because the insurance company spreads the risk across the entire member group. These plans generally require 70% of your employees to opt into coverage. Otherwise, you won’t meet the minimum participation requirements and can’t offer the plan.

Because small businesses have smaller risk pools, they may encounter more expensive monthly premiums. These high premiums and participation requirements often prevent small businesses from enrolling in group coverage. However, there’s another coverage option—small group health insurance.

Oregon doesn’t have a Small Business Health Options Program (SHOP). However, employers can get a small group health plan through the Oregon Health Insurance Marketplace. These plans, available to organizations with fewer than 50 FTEs, are often more affordable for small employers than group policies that are made for larger groups.

Those with fewer than 25 employees who pay an average annual salary of $50,000 or less per employee may also qualify for the Small Business Health Care Tax Credit. To be eligible for this tax credit, employers must contribute at least 50% toward their employees’ premiums and must choose a small group plan certified by the Oregon Health Insurance Marketplace.

The following companies will offer small group health plans in Oregon in 2025, according to HealthCare.gov’s rate review site.

According to a 2023 KFF survey, the average annual premium for group health insurance nationwide was $8,435 for single coverage (or $702 per month) and $23,968 for family coverage (or $1,997 per month). However, the average cost of a small group plan premium in 2023 came to only $381 per month for single coverage in Oregon.

The table below shows the preliminary small group market rates for 2025.

Integrated HRAs

If you’re determined to buy a group health plan but want to offset the out-of-pocket costs it may saddle your employees with, supplement it with an integrated HRA. Also called a group coverage HRA (GCHRA), this health benefit is for Oregon employers of any size that offer a group health plan.

With this type of HRA, you give a monthly allowance that your employees can use for medical care. Once they show proof of an eligible expense, you reimburse them tax-free up to their allowance amount. Eligible expenses with a GCHRA are costs the group plan doesn’t cover or fully cover, like coinsurance, deductibles, copays, and more. However, health insurance premiums aren’t eligible for reimbursement.

Not only are GCHRAs beneficial for employers looking to make their group plans more attractive, but they’re also customizable. While you can maximize your financial savings by pairing them with a high deductible health plan (HDHP), GCHRAs can work with any group health plan. But, only employees enrolled in your group policy can participate in the benefit.

There are also no minimum or maximum contribution limits with a GCHRA, so you can set the allowance that works for your budget and your staff’s needs. You can also divide your employees up to seven employee classes and offer different allowances or eligibility to each class for extra flexibility.

Stand-alone HRAs

Unlike integrated HRAs, stand-alone HRAs don’t work with a traditional group health plan. Instead, stand-alone HRAs allow Oregon employers to reimburse employees tax-free for qualifying out-of-pocket medical expenses and individual health plan premiums. This makes them a great option for employers looking for a replacement for costly and rigid group plans.

Like the integrated HRA, a stand-alone HRA enables you to choose a budget-friendly monthly allowance and reimburse your employees when they incur qualified expenses. However, stand-alone HRAs let you skip purchasing a group health plan altogether. Instead, your employees select the individual health coverage that works best for them. Then, you reimburse them for their premiums.

The following are the two types of stand-alone HRAs:

1. The qualified small employer HRA (QSEHRA): The QSEHRA allows small employers with fewer than 50 FTEs to reimburse their employees tax-free for qualifying out-of-pocket expenses and insurance premiums. While the QSEHRA has no minimum contribution limits, the IRS sets annual maximum limits. You can vary allowances by age and family size and choose to reimburse premiums only or both premiums and out-of-pocket costs. Employees must have a health plan with MEC to participate in the QSEHRA.
2. The individual coverage HRA (ICHRA): The ICHRA is for employers of all sizes. It works like a QSEHRA but has more customization options. There’s no maximum contribution limit, and you can vary allowances and eligibility using employee classes. ALEs can also leverage an ICHRA to satisfy the employer mandate instead of offering a group health plan. Employees must have a qualified individual health plan to participate.

Stand-alone HRAs are a personalized and budget-friendly alternative to group plans for all small employers in Oregon. With a QSEHRA or ICHRA, you can save money on health insurance coverage while giving your staff greater flexibility.

Health stipends

Health stipends allow small businesses in Oregon to give employees a fixed sum of money for health-related expenses. Stipends are easy to administer and have no contribution limits. So, budget-conscious small businesses with limited resources may find them appealing. You simply add the extra stipend money to your employees’ paychecks, and they spend it on their preferred healthcare items and insurance plans.

However, stipends have downsides. The IRS considers stipends taxable income. And you can’t ask for proof of insurance or any receipts for items or services listed in IRS Publication 502. Stipends also can’t satisfy the ACA’s employer mandate for ALEs.

Association health plans

Your next option is an association health plan (AHP). AHPs allow self-employed individuals and small businesses with fewer than 50 employees to join together to buy large-group health coverage. This way, many small businesses can access more affordable health coverage options. Generally, AHPs join companies within the same industry, profession, or region.

AHPs work like traditional health insurance. However, AHPs don’t have to follow many ACA regulations, so they’re not suitable coverage for ALEs. They also have limited covered medical services that may not impress your staff. If you want a more flexible plan, selecting a group plan or HRA is a better option.

Supplemental and ancillary benefits

Supplemental benefits are extra policies you can add to your compensation package to make your employees’ health benefits more robust. These benefits cover specific medical services and unexpected situations—like emergency room care, hospitalization, and prescription drugs—that their major health insurance plan may not pay for.

Supplemental plans differ from comprehensive health plans because most don't provide MEC. But they’re a great way to offer your employees even greater medical coverage.

You can also offer ancillary benefits like dental and vision coverage to better care for your employees.

Some of the most common types of ancillary and supplement health benefits are:

• Critical illness insurance: This additional benefit covers medical emergencies that regular insurance may not fully pay for, like cancer, stroke, and kidney failure.
• Accident insurance: These policies help pay for medical costs resulting from a covered accident.
• Vision and dental insurance: Most major medical plans don’t cover or fully cover vision or dental expenses for adults. An HRA can also reimburse employees for these expenses.
• Hospital indemnity insurance: These plans help employees pay for hospital confinement costs that standard health plans don’t typically cover.
• Health savings account (HSA): An HSA is an employee-owned account you and your employees can contribute toward. Employees can then use their HSA funds to save and pay for future medical expenses. HSAs require HSA-qualified health insurance plans.
• Flexible spending account (FSA): A healthcare FSA allows you to help pay for your employees’ out-of-pocket medical expenses. It covers many items an HRA does except for insurance premiums.

What plans are available on the individual market in Oregon?

Individual health insurance in Oregon includes Oregon Health Plans, private health insurance plans, or Medicare policies. Oregon operates a state-based exchange on the federal marketplace. Employees can use OregonHealthcare.gov to search for health coverage. However, they must enroll in a plan through HealthCare.gov.

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

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

Open enrollment in Oregon runs from November 1 through January 15. However, you can enroll in a plan outside this time frame if you qualify for a special enrollment period.

During 2023 open enrollment, 107,450 individuals and families in Oregon received advanced premium tax credits through the marketplace. Due to the Inflation Reduction Act, eligible individuals can receive these subsidies if their premiums exceed 8.5% of their household income through 2025.

How PeopleKeep can help Oregon employers

If you’re ready to add flexible, personalized health benefits to your employee benefits package, PeopleKeep can help. Our HRA administration platform makes it easy for all Oregon employers to design and manage their health benefits in just minutes each month.

With PeopleKeep, you choose and design the HRAs that meet your organization’s specific needs and budget. These custom benefits allow you to control costs and eligibility while allowing employees to choose their preferred medical care.

To make things even easier, we review your employees’ reimbursement requests for you, store documents, create and update legal plan documents, and ensure compliance with ACA, ERISA, and IRS regulations. By simplifying the benefits administration process, we help you save valuable time, money, and resources so you can focus on your other business options.