Minnesota employers with 50 or fewer employees have some new options to consider for health coverage in 2018, thanks to 2017 legislation spearheaded by the Minnesota Chamber. New laws allow small employers to consider “defined contribution” arrangements to support their employees in purchasing their own individual health insurance and make it easier for these small employers to consider self-funding.
“Small employers need more coverage options. They are increasingly struggling to keep up with rising costs in the fully-insured small group market,” says Bentley Graves, Minnesota Chamber director of health care policy. “Now is the time to consult with your broker or benefits adviser as you design your plans and enroll in a product for 2018.”
Small employers now have the ability to:
Increase access to self-insuring: Most large employers self-insure rather than buying health insurance for employees. Until now, Minnesota law had put small employers who wanted to consider self-insuring at a financial disadvantage compared with larger employers. The playing field has now been leveled so small employers looking to self-insure are no longer being asked to take on more proportional financial risk than large employers who self-insure. This means self-insuring may be more of a realistic option for a larger number of Minnesota’s small employers – potentially giving them more flexibility over plan design and more control over costs.
Use pretax defined contribution arrangements: With passage of the Affordable Care Act, small employers who attempted to set up defined contribution arrangements to help employees buy individual health insurance had to use after-tax dollars, unnecessarily increasing the cost of health insurance for employees and employers. Congress passed legislation in 2016 allowing small employers to use Health Reimbursement Arrangements to help employees purchase individual health insurance with pretax dollars. We successfully advocated for these changes in state law, too. Through these arrangements, employers have total flexibility over their financial exposure to the health coverage benefit they offer to their employees, and their employees have complete flexibility to choose the health insurance product that works best for them.
For more information on the law changes, contact Bentley at 651.292.4682 or firstname.lastname@example.org.