The Complete Guide to Open Enrollment for Employers

It’s here! Open Enrollment for your group health insurance plan has come around again, running from November 1 – December 15. Now is the time when you can choose new benefits, or review and change existing health insurance benefits for your employees, and we get it: this time of year can be hectic and stressful, with all of the questions that employees (and you!) might have. Not only that, but you’ve got the weight on your shoulders of knowing that this is your one chance to get this done until next year! But don’t worry, we’ve got you – first, check out our tips below for a smooth Open Enrollment, and then speak to an EZ agent who can help you find the perfect plan for you and your employees. 

employees sitting at desks in an office
To qualify for group health insurance, your business must have at least 1 full time employee other than yourself or your spouse.

Does Your Small Business Qualify for Group Health Insurance?

Let’s start with the basics. If you’re new to offering group health insurance to your employees, you might be wondering how you qualify to offer it. Well, it’s actually pretty simple, and more likely than not, your business will qualify! You need to:

  • Have at least one full-time employee who is not the business owner, or the spouse of the business owner
  • Be legally registered as a business entity in your state (regulation for this varies from state to state)
  • Contribute at least 50% to your employees’ monthly premiums

Why Take Advantage of Open Enrollment?

Ok, so your business qualifies to offer group health insurance, but should you? And if you’ve already got a plan in place, why review it during Open Enrollment? Well, there are a few very good reasons to do both:

  • You and your employees can save money – Enrolling in a group health insurance plan is often cheaper than enrolling in an individual plan. Not only that, but the more employees you can get to sign up, the cheaper the plan could be.
  • Changes in life circumstances mean changes in insurance needs – If you do already offer group health, you definitely need to take advantage of Open Enrollment and use this time to reassess your and your employees’ needs. Has anything major changed, like births, deaths, or marriages? If so, you might be able to find a plan that offers better or more tailored coverage for a better price.
  • Group health can mean tax advantagesWho doesn’t love to save on their taxes? Take this time to look into ways you could be saving, like checking if you qualify for the small business health care tax credit, or by choosing to offer tax-advantaged healthcare options, like HSAs, FSAs, or HRAs. 

What Should You Be Thinking About When Choosing a Plan?

Another important basic step in the process: knowing what you should be thinking about when exploring your options. Here are 4 essential factors that should go into your decision-making process:woman in a blue button up shirt with her hand on her chin and question marks around her

  • Costs associated with the plan – You’ll want to consider how much employees want to pay in premiums, while also remembering that you have to contribute at least 50% of the amount each month. Also keep in mind things like deductibles, copays, and coinsurance that can all add up, depending on how often your employees access medical services. 
  • The metal tiers of available plansFamiliarize yourself with the so-called metal tiers of plans: Platinum, Gold, Silver, and Bronze. These terms have nothing to do with quality of care, rather they indicate what percentage of costs a plan will pay for covered benefits. For example, popular Silver plans will usually cover around 70% of costs, with the insured paying the remaining 30%. 
  • The type of plan you want – In addition to choosing a metal tier, you’ll also have to consider what type of plan you want to offer to your employees. For example, you can choose from HMO, PPO, POS, and EPO plans; each of these types of plan will offer different price points, since some are more flexible about things like network coverage.
  • Insurance companies – Check out which insurance companies offer plans in your area, and what their networks look like; you want to be sure that they offer affordable care in locations that are convenient for your employees.

What Should Employees Consider?

So you know what you need to be thinking about, but are you ready to answer your employees’ questions, or take on their concerns? You can help guide them in choosing or changing their plan by telling them to take the following factors into consideration:

  • The price of the plan – Let your employees know exactly how much the plan will cost them per paycheck.
  • Their dependents – Your employees should think about who they will need to have covered by their plan, especially if they plan on adding on family members in the coming year, or if they have added any new household members since last year. You’ll also need to make clear your policy on contributing to dependent coverage.person with a megaphone and exclamation points coming out of it
  • Any changes in coverage – Make sure your employees know what is covered under the plan, especially if there is anything new being added, like dental or vision coverage. 
  • Any added benefits – In addition, if your plan is going to have any new benefits, like telemedicine or wellness programs, let your employees know.

Top Tips for Employers

Group health insurance can seem a bit overwhelming, especially since studies show that 35% of employees have little to no understanding of their healthcare coverage! Not only that, but  22% of employees are confused during open enrollment, 20% are anxious, and 21% are stressed, so it can be tough to know how to approach this subject. But there are some ways to make the process go a little more smoothly. For example, you can:

  • Go digital – You don’t have to print out reams of paper, or have endless meetings with employees about benefits (which might be tough with all of the work-from-home going on right now)! Save paper, toner, and your and your employees’ sanity by offering everything in PDF form, and by considering holding a virtual benefits fair, which employees will be able to access when it works for them from the comfort of their home. 
  • Keep it simple – When emailing employees about their benefits, be as concise as possible, with price per paycheck and benefits clearly laid out, using language that is easy to understand. You can also include any FAQ sheets you get from your insurer or agent, as well as a glossary of terms and acronyms. 
  • Send out a surveyWhile you do have to be careful about privacy when it comes to employees’ health, there is no reason why you can’t send out an anonymous survey to find out what your employees are most interested in when it comes to their insurance plan, so you can either make a choice to change the plan you’re offering, or can recommend the right plan to them.
  • Be creative with your communication – Email is great, but you have tons of options when it comes to follow-up communication and reminders about enrollment, including:person sitting at a table with their cell phone in their hands
    • Text messages
    • Posters
    • A dedicated intranet webpage
    • Videos on screens in common spaces
    • Notices on paychecks (both hard checks and online)
    • A chat channel, through a platform like Slack
    • A Twitter chat, complete with hashtags that other employees can search

Yes, it’s Open Enrollment time again, what some might consider the most confusing time of the year. But you know? You got this, and we’ve got your back if you need help choosing, reviewing, or changing your employees’ healthcare plan. Come to EZ.Insure for a dedicated agent who can answer all of your questions, every step of the way, as well as find you fast, accurate quotes and sign you up for a great plan – all for free! No hassle, no obligation. To get started with us today, simply enter your zip code in the bar above or to speak to an agent, call 888-350-1890.

The Pros & Cons of ICHRAs

Individual Coverage Health Reimbursement Arrangements, or ICHRAs, have been available since January 2020, and have been growing in popularity over the past year. This is because they allow employers to save money while offering employees a way to get healthcare benefits. They are a great alternative to group health insurance, especially since the rules surrounding them are less restrictive than those surrounding traditional healthcare plans, or even those of other HRAs. For example, there are no contribution maximums and no company size restrictions on ICHRAs. Before deciding if an ICHRA is right for you, you should first weigh the pros and cons.


tax free written on a blackboard in white and yellow
All reimbursements for each employee are tax-free.

ICHRAs are a type of health reimbursement arrangement, a health benefit that differs from an HSA in that it is an arrangement, as opposed to an account. Employees don’t put money aside for their healthcare expenses; rather, you reimburse them for their medical expenses. You provide a set monthly allowance for employees’ premiums and medical expenses. ICHRAs have a lot of advantages for both you and your employees, including: 

  • You can choose how much you want to contribute every month, and there is no minimum or maximum. Once set, you will give that amount to employees monthly; they cannot exceed that amount, which will help you budget accordingly.
  • Reimbursements are tax-free.
  • You can offer different monthly allowances to different groups of employees based on the type of job they do, how many hours they work, and even family status.
  • Employees use the money you offer them to find an individual healthcare plan that suits their needs. This is empowering to them, and will allow you to focus on your business instead of trying to find a group health insurance plan that fits all of your employees’ needs. 
  • Employees need to have an individual insurance policy to participate in an ICHRA, so if you enroll and start reimbursing employees mid-year, employees will become eligible for a Special Enrollment Period to choose a major medical health insurance plan. This means that they will not have to wait until the Open Enrollment Period, November 1- December 15, to buy a health insurance plan.


There are many positives to offering an ICHRA, but sometimes with the good comes some bad. The disadvantages of ICHRAs include:

red warning sign
Employees who are on their spouse’s health insurance plan cannot participate.
  • This type of arrangement prevents employees from being eligible for advanced premium tax credits on ACA Marketplace plans. So if an employee decides not to take part in an ICHRA that is considered “affordable,” they will not be able to receive tax credits with an ACA plan. 
  • Employees who are on their spouse’s health insurance plan cannot participate. The only way to participate is if they purchase their own individual health insurance and get reimbursed for it through the HRA. 

Need Help?

For many employers, ICHRA pros outweigh the cons and can seem like a no brainer, which is why they are growing in popularity. You get to help your employees purchase health insurance plans that meet their specific needs, and you also get to save money in the process. Reimbursements are tax-free for both employees and employers, meaning that they are tax-deductible for employers, and income tax-free for employees, which will save you on employer payroll taxes. It’s a win-win situation.

If you are interested in an ICHRA, or want to explore your options for a group health insurance plan, reach out to an EZ agent in your area. Our agents are highly trained and work with the top-rated insurance companies in the country. We can assess your needs and compare plans instantly, for free. To get started simply enter your zip code in the bar above, or to speak directly with a local licensed agent, call 888-998-2027.

Group Insurance For Furloughed & Laid Off Employees

The coronavirus pandemic has taken a toll on many small businesses, and many are now struggling to stay afloat. In order to keep going, many small business owners had no choice but to furlough or lay off employees in order to save money. If you are one of them, you might be wondering what your former employees’ health insurance options are after you let them go. Is there still a way you can offer them group insurance? You can choose whether to pay monthly health insurance premiums on behalf of your employees, but if it is not possible due to financial constraints, your employees do have other options.

Furloughed Vs. Laid Off

person carrying a box of office supplies.

Health coverage for an employee is determined by the employer’s (your) health plan. The plan indicates how many hours an active employee has to work to be eligible for health insurance. There are also rules surrounding what happens to their health insurance when they are no longer an active employee. When an employee is :

  • Laid off, their employment is terminated, even if you are considering the lay off temporary. After an employee is laid off, their health insurance plan ends on the last day of the month they were laid off.
  • Furloughed, their hours are reduced, or they might not be working at all. The difference is that they can expect to return to work again when the furlough is over, so they can continue to get health insurance coverage during the furlough period. If this is the case, the employee will either be responsible for their share of the plan’s premiums, or you, the employer, can temporarily waive employee contributions and pay all of their premium.

ERISA & Federal Income Tax Rules

In general, nothing actually prevents you from paying monthly premiums on behalf of furloughed or laid-off employees. You have the option to choose to pay monthly premiums as long as you are able to. The premium will continue to be excludable from the gross income of the employees. Be aware, though, that if the plan rules do not permit an employee to be covered, then you are in danger of:

  • Potential loss of tax-exempt status of the plan, which means both you and your employees might owe back taxes, since pre-tax qualification would be lost.
  • Your insurance company denying claims for any employees that they determine are not eligible to participate in the plan. 
  • A possible fiduciary breach under the Employee Retirement Income Security Act (ERISA) if plan assets were used to pay for benefits of non-eligible employees.

    COBRA on a piece of paper.
    Laid-off and furloughed employees qualify for COBRA insurance.

COBRA Insurance

Another option to continue coverage for your employees is the COBRA program. Both laid-off and furloughed employees qualify for a Consolidated Omnibus Budget Reconciliation Act (COBRA) plan if their group plan is terminated and you can no longer pay their premiums. COBRA can be expensive for your former employees, because if you do not contribute to their premiums, they will have to pay the full amount. 

ACA Marketplace

Last but not least, losing a job is considered a qualifying life event, so a Special Enrollment Period will open up for your former or furloughed employees after they lose their job and their coverage. This means that they will have 60 days to get a health insurance plan on the ACA Marketplace. This could be a cheaper option for your employees than COBRA.

EZ Can Help

The pandemic has actually caused some changes in the way that group health insurance works. For example, some states have issued orders requiring or encouraging insurance companies to allow employers to make changes to their eligibility requirements so they can continue to offer group insurance to furloughed or laid off employees. Some states are even allowing a grace period for premium payments. To find out if your state is one of them, speak to an EZ agent, who can help find out the information for you. If you are interested in continuing to offer a group insurance plan, we can help you find a reasonable way to provide insurance to the employees that you had to let go. The times we are living in are not normal by any means, and we know it is not an easy decision to let go of your valued employees. EZ can help by offering our services for free, which includes checking all possible options, answering any questions, and comparing quotes.

To get started, simply enter your zip code in the bar above, or to speak directly with an agent, call 888-998-2027.

W-2 Requirements for a QSEHRA

If you decide to offer a qualified small business health reimbursement arrangement (QSEHRA) to your employees, you might have some questions about how to report the benefits on your employees’ W-2s. The IRS requires employers to report these benefits, including how much each employee is entitled to receive in reimbursements in a calendar year. There are different variables to consider when it comes to filling out your W-2s, such as what you need to do if an employee did not participate in the QSEHRA or how to report carryover amounts, so let’s go over the most important things that you need to be aware of.

Reporting QSEHRA Benefits On the W-2

paper with tax incentive in the middle and a computer mouse and pen over the papers.
You can report your QSEHRA contributions on the W-2 form in Box 12. 

If you have an employee who is participating in your offered QSEHRA, you must report the total amount of the employee’s permitted benefit on Form W-2 in Box 12, using Code “FF.” The IRS description for this code is: “Permitted benefits under a qualified small employer health reimbursement arrangement.” This benefit is not counted as taxable income for the employee. 

It is important to note that over-the-counter medications used to require a prescription for reimbursement. However, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed in March 2020, has made over-the-counter medications eligible for reimbursement without a letter from a doctor or prescription. The medications should be reported on the W-2 Form as income in box 1 as well as in box 3, Social Security wages, and box 5.

Calculating The Benefits

When reporting on your W-2s, the permitted benefit amount should include only newly available QSEHRA funds. Any carryover amounts from previous years should not be included. However, if you use a non calendar-year QSEHRA, you will need to report a prorated amount.

Take the following example of a QSEHRA with a plan year that runs from August 1 to July 31:

  • For the plan year beginning August 1, 2020, a QSEHRA benefit of $3,000 was available to every employee for August 1, 2020 through July 31, 2021. The amount reported on the employee’s 2020 Form W-2, box 12, code FF is $1,500 (for August-December 2020).
  • In the new plan year (2021), the QSEHRA provides $3,500 to every employee for August 1, 2021 through July 31, 2022. The amount reported on the employee’s 2021 Form W-2, box 12, code FF is $3,250 ($1,500 for January-July 2021, and $1,750 for August-December 2021).

calculator over money and a notepad next to it with a pen

What About Carryovers?

When a QSEHRA has a carryover provision, only the newly available amounts are reported. If the QSEHRA allows for the use of carryover amounts from prior years, those amounts are not included in the amount reported for the current year. For example, if your employee has a remaining allowance of $1,000 in their QSEHRA allowance for 2020 and they receive $3,000 for the following year, only the $3,000 in new funds will be reported on their 2021 Form W-2 in box 12, Code FF.

What If An Employee Didn’t Participate?

Even if an employee did not participate in your QSEHRA, the benefits must still be reported on the employee’s W-2. You will report the amount of benefit that they were entitled to receive.

What About Employees With No MEC?

Employees who do not have the required minimum essential coverage (MEC) can still receive reimbursement through the QSEHRA, but will have to pay income tax on it. Specifically, any taxable reimbursements should be included as other compensation in box 1: Wages, tips, and other compensation.

mans body with business attire and money in his hand.

If you issue a QSEHRA reimbursement and then later learn that the employee did not have MEC for the period in which the reimbursement occurred, the employee must repay the reimbursement as soon as possible.

However, if W-2 reporting is required before the employee has repaid the amount, that amount is taxable to the employee:

  • The amount must be included in the employee’s gross income on Form W-2, box 1.
  • The amount is not subject to FICA tax and should not be included in box 3, Social Security wages, or box 5, Medicare wages.

Have Questions?

If you choose to provide a QSEHRA to your employees, great! They are an excellent way to help your employees get the healthcare they need. But know that you will have to report these reimbursements on your W-2s, and it is important that you do it correctly in order to abide by the QSEHRA’s guidelines. If you need help exploring different types of small business HRAs, or have questions about offering healthcare in general, EZ can help. We will compare quotes, answer any questions and even sign you up for a plan at no cost to you. To get started, simply enter your zip code in the bar above, or to speak directly with an agent, call 888-998-2027.

Pre-Tax vs After-Tax Deductions

If you are thinking of offering group insurance or a HRA to your employees, or if you are already offering them one or both, you might be wondering how to withhold employee insurance premiums and your contributions from their paycheck. Do the deductions come out of their paycheck pre-tax or after-tax? In some cases, you can deduct their premium and your contributions from their paychecks pre-tax; other premiums may need to be deducted after-tax. It is important to know what kinds of contributions can be deducted pre-tax, as well as the advantage and disadvantages of doing so. 

Pre-Tax Deductions

silhouette of a group of people standing in front of a large red heart.
Group health insurance deductions can be taken pre-tax.

Taking a pre-tax deduction means that you, the employer, withdraw money directly from your employees’ paychecks to cover the cost of benefits before income or payroll taxes are withheld. Internal Revenue Code (IRC) Section 125 allows for payroll deductions to be taken pre-tax for certain benefits, including:

In order to know which pre-tax benefits are exempt from state and local taxes, you will have to check your state and local laws. 

What is the advantage of deducting premiums and contributions from your employees’ paychecks pre-tax? For employees, when premiums and contributions are deducted pre-tax, the amount of income that they have to pay taxes on is reduced, in some cases by up to 40%. 

Doing this not only benefits your employees, it also benefits you; pre-tax deductions lower your tax liability, including the Federal Unemployment Tax (FUCA), State Unemployment Insurance (SUI) and FICA. For every dollar contributed to a retirement account, FSA or insurance plan, an employee’s taxable income is decreased accordingly. Your employees’ paychecks will effectively be lowered, meaning you will pay less in payroll taxes. 

The drawback is that your employee might owe taxes on the money you withheld in the future. This is because they did not pay any federal, state, and local taxes on the contributions at the time they were withheld. These taxes were simply deferred. For example, when your employee retires and begins drawing on their 401(k), they will owe taxes on the money they use from their pre-taxed 401(k) plan. 

After-Tax Deductions

caucasian female hand holding up hundred dollar bills.
Contributions to retirement plans and other benefits are deducted after income and payroll taxes are deducted. 

After-tax premiums and contributions are deducted from your employees’ paychecks after income and payroll taxes are deducted. Unlike pre-tax deductions, these will not affect your employee’s taxable income. However, you and your employee will owe more payroll taxes with after-tax deductions. If premiums are deducted after-tax, your employees will not pay taxes when using the benefits in the future, such as when they withdraw money from a post-tax retirement or health arrangement plan. Common after-tax premiums include:

  • Some retirement plans (such as a Roth 401(k) plan)
  • Disability insurance
  • Life insurance
  • Major medical coverage purchased by an employee on their own

Need Help?

If you need help finding group insurance, a HSA, FSA, or HRA, then EZ.Insure can help. We want to make sure that you save as much money as possible, which is why we compare all plans in your area, for free. We will assess your business’ and employees’ needs and find the best plan that will help cut costs, not coverage. If you need help figuring out which plans qualify for pre-tax and post-tax deductions, we can help with that too. We will answer your questions and guide you through the process. To start comparing plans for free, simply enter your zip code on the bar above, or to speak directly with an agent, call 888-998-2027.

Employee Assistance Programs 101

Employee Assistance Programs (EAPs) have been around for longer than you might think, and have an interesting origin. They began in the 1940s as programs to help combat employee alcoholism, and from there the Employee Assistance Program evolved to help employees manage daily challenges in work and life. Maintaining a healthy work life balance can be difficult for many employees, which can cause stress, affect well-being, and lower productivity levels. As an employer, an EAP can be a major benefit to you; having one in place can help keep your employees healthy and happy, which will in turn help boost your bottom line. Before you can decide whether an EAP is right for your business and your employees, you need to know exactly what they are and what you can offer your employees through them. 

What Is An Employee Assistance Program?

EAPs are voluntary benefits that employers can choose to offer. You are not required to provide them, but they can be useful. Not all Employee Assistance Programs offer the same services, but services offered can include:

man with his hands on his head with the word stress on his face and stress written on a blackboard behind him.

  • Counseling for personal and work-related issues, including anger management, anxiety, depression, substance abuse, psychological problems, psychiatric disorders, chronic disease, stress management, and grief. 
  • Training and development for things like communication skills, conflict resolution,  team-building, leadership coaching, and more.
  • Resources and referrals for childcare, and other forms of care.
  • Financial or legal resources for planning, retirement, divorce, custody cases, debt, and more.
  • Access to wellness programs such as those for weight management and substance abuse, as well as gym memberships.

Services provided are free to employees, and sometimes for their families, as well. 

Why Offer an EAP?

According to the Journal of the American Medical Association, in 2003, U.S. companies lost more than $44 billion due to low productivity related to employee depression. Companies also lost $100 billion annually, or $3,000 per employee, because of substance abuse and mental illness. If you can help your employees manage their stress, you can help avoid this decrease in productivity.

blue arrow going downward with a blue background.
Employee Assistance Programs will help decrease turnover rate of your employees, as well as absenteeism due to stress.

Employee Assistance Programs provide emotional support and help employees maintain a healthier lifestyle. Employees can meet with EAP consultants by telephone or in person for assistance with problems that keep them from doing their best. Offering an EAP can increase employee satisfaction and productivity, while decreasing:

  • The cost to your business of employee stress 
  • The risk of workplace violence
  • Turnover
  • The risk of litigation
  • Absenteeism

Determine What To Offer

Your employees have different needs, so it can be difficult to determine which benefits to provide. In order to determine which services to offer, you should conduct a healthcare survey. Ask your employees what matters most to them, but remember to keep it confidential. 

The well-being of your employees matters. There are a variety of Employee Assistance Programs to choose from, and even some comprehensive group health insurance plans that offer some of these services. EZ can help sort through all of your options. Our highly-trained agents can assess your business and what your employees need. We will provide you with guidance to find a great plan that works for everyone and will save you money. To compare quotes instantly, simply enter your zip code in the bar above, or to speak directly with an agent, call 888-998-2027.