Thought You Couldn't Offer Health Insurance? Think Again

If you've ever looked into offering health insurance and thought, "We don't qualify for this," you're not alone.

For many small businesses, traditional group health insurance can feel out of reach. Maybe your team is too small. Maybe not enough employees want to enroll. Or, the cost doesn't make sense for where your business is now. If any of these scenarios sound familiar, you're in the right place.

Why Group Health Insurance Doesn't Always Work

Group health insurance makes sense for companies whose headcount remains relatively stable year over year. That means it isn't always a great fit for smaller teams where priorities and employee size can shift quickly.

For teams like this, a few common challenges come up:

• Participation requirements that are hard to meet

• Rising premiums make renewals more unpredictable

• Limited plan options that don't fit everyone's needs

• A handful of employees spread across multiple states

If any of these factors are in play, offering coverage or keeping it can feel like an uphill battle. Especially if it's standing in the way of attracting and retaining top talent.

The good news is that group plans aren't your only option, and we're here to help you evaluate another alternative.

All About the Health Insurance Reimbursement Model

If you don't qualify for a group plan or will no longer qualify, a health insurance reimbursement model, also known as an Individual Coverage HRA (ICHRA), could be worth a closer look.

ICHRA is a way to offer employees health benefits without choosing a single plan for everyone. Instead of sponsoring a group policy, employees select their own plan using a budget you determine, and you reimburse them tax-free for eligible medical expenses.

Who ICHRA Is a Good Fit For

ICHRA isn't a replacement for every scenario, but it's worth considering if:

• You've been denied group coverage due to participation requirements

• Your team is spread across multiple states

• You mostly employ part-time employees, with a limited number of full-time employees

• You want to offer benefits but need a fixed, predictable budget

• Employees have varied coverage needs that one plan can't satisfy

In short, it can be a strong option when a one-size-fits-all plan doesn't reflect how your team works.

How ICHRA Works in Practice

At a high level, here's how it works:

• You set a monthly allowance: Decide how much you want to contribute per employee. That amount stays predictable month to month.

• Employees choose their own plans: They select individual coverage based on their doctors, prescriptions, and personal needs.

• You reimburse expenses tax-free: Premiums and other eligible healthcare costs are reimbursed within the allowance you've set.

This structure gives both sides more control. Employers can manage costs, and employees can choose coverage that fits their lives.

Why Businesses Turn to ICHRA

More Control Over Costs

With traditional plans, renewal increases can be hard to predict. ICHRA shifts that dynamic. Because you're setting the limit month-to-month, budgeting is more straightforward. That means you don't need to adjust your plan every year to keep up with premium increases.

Flexibility for Different Employee Needs

Not every employee needs the same coverage. For example, some have families, while others care about specific access to doctors or specialists. Instead of trying to find a plan that works for everyone, ICHRA allows each employee to choose their own.

A Way to Offer Real Benefits Without Group Constraints

ICHRA removes many of the barriers related to enrolling and maintaining a group plan. There are no minimum participation requirements, which makes it easier to offer something meaningful, even if your team structure fluctuates.

Attracting and Retaining Top Talent

For many employees, the breadth and depth of an employer's benefits offering can make or break their relationship with their employer. Our internal company data shows that employers who offer health insurance experience 12% lower rates of voluntary departure than employers who don't. ICHRA offers an alternative path to providing benefits for employers who can't or don't want a group health plan.

You May Have More Options Than You Think

Health insurance decisions can feel stressful or limiting if group coverage isn't on the table. But there are other approaches you may not have considered yet. At Justworks, we want to make it as easy as possible to find the right plan that fits your team.

Unlike other providers, Justworks gives you the ability to choose from all three health insurance models, including small group, large group, and individual plans via ICHRAs.

If you're exploring how to offer health benefits that feel right for your team, comparing options and plans is simple from our self-service platform. And, all customers and their employees can reach out to our award-winning support team with any questions. Get started today.