Health insurance options for vision clinic employees

The Vision Council¹ found that nearly 64% of adult Americans wear prescription eyeglasses. That's 166.5 million people who rely on vision clinics for their comprehensive eye health. From vision examinations to contact lenses, employees at these clinics provide services that help people see the world clearly. A caring staff member makes a big difference.

Given increasing healthcare costs and the growing need for skilled professionals, vision clinics should focus on supporting the well-being of their employees. Health insurance coverage plays a crucial role not only in maintaining the health of your team but also in boosting morale and productivity. However, dealing with the intricacies of health insurance can be time-consuming and challenging for clinic owners and HR administrators.

In this article, we'll go over your health insurance options and offer insights on how to tailor them to your team’s needs.

In this blog post, you'll learn the following:

• Why providing health benefits to employees at your vision clinic is beneficial for the business.
• The different health insurance options available for your vision clinic.
• What health benefit is the most cost-effective for your business.

The importance of offering health benefits to employees

Health benefits are the best perk you can provide. According to our 2024 Employee Benefits Survey, 92% of employees rated health benefits as important. Offering health coverage to your team can help you attract and keep skilled employees, boost workplace morale, and foster a supportive and healthy environment for everyone, contributing to the success of your vision clinic.

So, what are your health insurance options? Let's review them in more detail below.

Group health insurance

Traditional group health insurance has been the go-to option for years. But that doesn't make it the best fit for every employer. Group health insurance allows you to provide coverage for your entire team with a single, standardized policy. It's a one-size-fits-all approach, which means the unique needs of individual employees aren't taken into account.

Employers offering a group policy can select one of the following network options:

• Preferred provider organization (PPO) plans
• Health maintenance organization (HMO) plans
• Point of service (POS) plans
• Exclusive provider organization (EPO) plans

Employers and employees typically share the cost of premiums for group coverage.

According to KFF's 2024 Employer Health Benefits Survey², the average annual premiums for employer-sponsored health insurance were:

• $8,951 for individual coverage
• $25,572 for family coverage

For large employers, a group plan can have low monthly premiums. This is because the insurer spreads the risk of covering your employees across the entire group. But, this is different for small organizations.

If the cost isn't a concern for you, there might be other challenges to consider. You might not have enough employees to meet the participation requirements for group health insurance plans. They typically require at least 70% of your employees to enroll in the plan. Plus, group health insurance plans generally offer fewer coverage options and less flexibility than individual health insurance plans.

Health reimbursement arrangements (HRAs)

A stand-alone health reimbursement arrangement (HRA) is a popular alternative to a costly group health plan. With an HRA, you can cover the cost of employees’ individual health plans. An HRA is an employer-funded health benefit that reimburses employees for more than 200 types of eligible out-of-pocket medical expenses.

Here are some examples of HRA-eligible expenses:

• Individual monthly premiums for health, dental, and vision coverage
• Vision expenses, such as contact lenses or annual eye exams
• Dental expenses, such as fillings or routine cleanings
• Doctor's visits
• Prescription drugs
• Over-the-counter medication

Tax-advantaged HRAs help employers manage their budgets effectively. They also give employees greater control over their healthcare needs. Instead of getting a group plan, employees can choose a plan with the in-network healthcare providers they want.

Here's how an HRA works:

• You set aside an allowance of tax-free money for your employees.
• Your employees purchase the medical items and services they need.
• They submit proof of their eligible expenses for reimbursement.
• After verifying the expense meets IRS guidelines, you reimburse them up to their allowance amount.

Several HRAs are available, making it easy to find the one that best suits your vision clinic’s needs.

There are two types of HRAs you can offer instead of a group plan:

• The qualified small employer HRA (QSEHRA): The QSEHRA is for small employers with fewer than 50 full-time equivalent employees (FTEs). The IRS sets annual contribution limits for the QSEHRA. Eligible employees need health plans that provide minimum essential coverage (MEC) to participate. They can get this through individual health insurance or a parent’s or spouse’s group plan.
• The individual coverage HRA (ICHRA): The ICHRA is like the QSEHRA, but it offers greater flexibility. It's for employers of any size and has no restrictions on contributions, so you can offer your employees as much money as you'd like. Plus, you can differ allowances and benefit eligibility with 11 employee classes, such as full-time or salaried workers. Employees need individual health plans to take part in the benefit.

If you prefer the familiarity of a group plan but also want to tailor your benefit to better address your employees' needs, consider using a group coverage HRA (GCHRA). The GCHRA, also known as an integrated HRA, works alongside a group health insurance policy. It's a great add-on for high deductible health plans (HDHPs) that lets you cover your employees out-of-pocket expenses.

Health savings accounts (HSAs)

Health savings accounts (HSAs) are another option for your vision clinic. However, they don’t replace health insurance coverage. An HSA is a savings account with tax benefits that you can pair with an HSA-qualified HDHP to cover eligible medical expenses. Both employers and employees can put money into an HSA before taxes, which lowers the employee’s taxable income for the year.

Employees can use their HSA funds for various medical expenses, such as:

• Deductibles
• Copayments
• Coinsurance

Unused funds can carry over from one year to the next, which makes an HSA a valuable tool for saving for future healthcare expenses. Additionally, funds your employees withdraw for qualified medical expenses aren't subject to federal income tax.

Flexible spending accounts (FSAs)

There are also flexible spending accounts (FSAs). An FSA is an arrangement that allows employees to save some of their pre-tax income for eligible medical expenses. Employers can also contribute to FSAs. Money put into an FSA isn't subject to income tax, Social Security tax, or Medicare tax. This can result in significant savings for the account holder.

Like an HSA, your employees can use an FSA to cover a wide range of medical expenses, such as:

• Copays
• Deductibles
• Prescription medications
• Certain over-the-counter items

However, keep in mind that your employees have to spend their FSA funds within the plan year. If not, they'll lose them. That means they'll have to plan and budget wisely to get the most out of this benefit.

Like an HSA, an FSA doesn’t replace health insurance. Instead, it supplements a group policy or an HRA.

Health stipends

Finally, we have health stipends. A health stipend is extra money you give to your employees alongside their regular pay. Because a stipend is not a formal benefit and is considered extra income, it's taxable. You can provide this benefit to employees to help cover the costs of health-related expenses.

This can include expenses such as:

• Monthly gym memberships
• Wellness programs
• Medical plans
• Vision plans
• Dental plans
• Annual exams

Although not as cost-effective as an HRA, a health stipend is an alternative for companies to support their employees' well-being and encourage a healthy work-life balance. It’s a good choice for vision clinics with several employees who qualify for premium tax credits (PTCs).

Exclusive discount program for vision clinic employees

You can also offer complimentary vision services, such as routine eye exams, as part of your employee benefits package. Healthy vision is crucial for performing tasks effectively, especially in a clinical environment.

If you can't provide free vision services, consider offering them at a lower price. Discounts on eye exams or prescription glasses will still go a long way. Who wouldn't want a bargain on their favorite glasses?

By providing free or reduced vision services, vision clinic owners demonstrate their commitment to employee health. This can potentially lead to higher retention rates and lower turnover costs.

How to effectively manage your health benefit

HRAs can provide your vision clinic with flexibility and cost savings compared to group plans. You don’t have to offer an HRA alone; PeopleKeep can help you do so! Our HRA administration software helps organizations set up and manage their health benefits in minutes each month.

When you offer an HRA through PeopleKeep, our team of experts will:

• Generate legal plan documents on your behalf
• Review employee expenses based on IRS guidelines
• Send necessary notices automatically for your convenience

Your employees can even shop for qualifying health insurance coverage right from their PeopleKeep account.

With our easy-to-use software and award-winning customer service, offering an HRA is a breeze. We handle the pesky administrative tasks for you so you can focus on other parts of your vision clinic.

Conclusion

The quality of your vision clinic depends on its employees. Don't leave them hanging when it comes to their health coverage. When building your optometrist benefits package, it’s important to know your health insurance options. Choosing the right health benefits for your vision clinic employees can foster a supportive workplace. From traditional medical insurance plans to HRAs, each option has its unique benefits and considerations. An HRA specialist with PeopleKeep can help you find the right fit for your team.

1. The Vision Council
2. KFF 2024 Employer Health Benefits Survey