Must you break up together with your group well being advantages?
Should you’re sad together with your group plan or simply interested in different choices, listed here are some concerns for shifting on and why an HRA could be higher for your small business.
On this article
The origin story of well being advantages
As a approach to management inflation throughout World Conflict II, the federal authorities froze wages.¹ As a responsive measure, employers began providing “fringe advantages” to draw staff. This included medical health insurance, and the associated fee was negligible. In 1950, employer contributions for group well being protection was 0.5% of the worker’s compensation. However what started as a nominal price has skyrocketed, making it a significant P&L drain for employers.
| 12 months | Employer prices for group well being insurance² |
| 1950 | 0.5% of worker compensation |
| 1980 | 3.7% of worker compensation |
| 2010 | 7% of worker compensation |
| 2025 | 9% of worker compensation³ |
Employer prices have outpaced inflation and compensation, making group well being plans a finances concern. Since 1999, employer medical health insurance prices have tripled relative to worker pay.4
Since 1999, employer medical health insurance prices have tripled relative to worker pay.
The ache factors of group medical health insurance
As a result of group medical health insurance has lengthy been the default possibility, many companies have used it however struggled with the prices. What began as a handy approach to offer well being advantages has change into an costly, unsustainable burden.
Excessive prices: Along with the gradual price will increase over time, astronomical charge hikes have change into the norm for group medical health insurance carriers.5
Unpredictability: These charge hikes aren’t predictable, so a enterprise isn’t capable of plan their finances or forecast income, affecting not simply advantages however enterprise general.
Participation necessities: If employers don’t meet participation necessities, a service can refuse to supply sure plan sorts or cancel the coverage; the IRS also can impose a nice or tax penalty.
Worker dissatisfaction: Group advantages supply a single possibility: a one-size-fits-all plan. Meaning whether or not an worker is 25 or 50, wholesome or sick, all of them get the identical protection. When pressured into one mildew, staff might be dissatisfied and even select to go away.
In 2025, employers paid almost 3 times greater than staff did for household protection.
Learn: Double digit renewals & danger don’t have to return with the territory
Steps for evaluating your group insurance coverage
Step 1: Decide the professionals and cons of your group medical health insurance service. What’s working? What’s not? What do you need to be completely different? Discuss to workers, HR, and finance for suggestions.
Step 2: With that perception in place, run a value/profit evaluation of your group plan. Should you’re working with a dealer, it is a nice time to have interaction them.
Step 3: Assessment your contract for termination clauses, so that you’re conscious of your timing choices must you determine to modify group medical health insurance.
Step 4: Should you’re contemplating an HRA to interchange your group plan, take our HRA quiz to seek out out what would work greatest for you, use our tax-savings calculatorand find out about HRA particular enrollment durationstogether with mid-year plan adjustments. It’s also possible to join with an HRA specialist to speak by way of your questions.
What’s an HRA?
A Well being Reimbursement Association (HRA) is a tax-advantaged well being advantages resolution the place employers give a month-to-month allowance to staff for certified medical bills and insurance coverage premiums. The employer units the finances, and the staff purchase healthcare plans from the ACA or state market.
A price-controlled various to group well being plans
A Take Command HRA is a contemporary advantages mannequin for America’s most people-focused industries
Many employers are on the lookout for choices exterior of group medical health insurance however are not sure of the alternatives (or if there are any). A Take Command HRA is a cost-controlled various to group insurance coverage that takes a very completely different strategy. It’s a contemporary well being advantages mannequin that permits employers to offer cost-effective, versatile, customized protection.
Advantages of a Take Command HRA
Funds management: With a Take Command HRA, you set the finances. No shock charge hikes, no renewal jumps. You select the allowance to provide staff every month, and it solely adjustments if and while you need it to. Meaning you management your prices right down to the penny, and you may forecast with 100% accuracy.
Worker selection: An HRA is designed for workers to decide on the well being plan they need. It’s not a trouble—it’s supposed that approach. A 25-year-old should buy a high-deductible plan and a 50-year-old should buy one with a decrease deductible. There’s full flexibility for everybody to get what works greatest for them.
Streamlined course of: Our HRA administration platform streamlines processes and reduces paperwork, making it a win for admin. Your HR workforce not has to decide on the group plan, and so they can relaxation assured that compliance and regulation are dealt with. It offers your hardworking workforce room to breathe and concentrate on different priorities.
Versatile choices: Take Command has HRAs for small companies, mid-market firmsand enterprise companies. Every possibility satisfies regulatory necessities for medical health insurance. Along with choices for each measurement enterprise, you may as well use worker lessons to designate distinctive allowances for various worker teams.
Participating your dealer
Take Command works with hundreds of medical health insurance brokers all through the U.S. Should you’re working with a dealer, we’re glad to talk with them about whether or not an HRA can be an excellent match. You’ll be able to go alongside our dealer toolkit or ICHRA for brokers.
Hold studying
The brand new advantages various to group medical health insurance
Group medical health insurance would not work for each firm. Should you’re seeing large will increase 12 months over 12 months, you’ve got obtained a danger downside. Fortunately, there’s a simple various to group plans that gives fashionable, customized advantages with out the unpredictability and lack of management.
Double digit renewals & danger don’t have to return with the territory
Particular Enrollment Durations and ICHRA make signups simpler
One of many advantages of ICHRA is that it triggers a particular enrollment interval (SEP), which implies an employer can undertake an ICHRA plan at any time of the 12 months and their staff will have the ability to enroll in a qualifying plan instantly as a substitute of ready for the following open enrollment interval.
HRA particular enrollment durations and mid-year plan adjustments
For brokers: why your purchasers ought to rethink group well being plans
Did we point out that medical health insurance might be complicated and irritating? It retains HR up at evening and is the P&L line merchandise CFOs dread. Take Command is right here to vary that.
Out with the previous, in with the ICHRA
Contact Take Command to find out about switching your group well being plan
References
- https://www.ebsco.com/research-starters/historical past/emergency-price-control-act-1942
- https://www.brookings.edu/articles/effects-of-employer-health-costs-on-the-trend-and-distribution-of-social-security-taxable-wages
- https://www.bls.gov/information.launch/pdf/ecec.pdf
- https://information.rice.edu/information/2025/study-finds-employer-health-insurance-costs-have-tripled-relative-employee-pay-1999
- https://www.kff.org/health-costs/annual-family-premiums-for-employer-coverage-rise-6-in-2025-nearing-27000-with-workers-paying-6850-toward-premiums-out-of-their-paychecks/
