Small business health insurance in Ohio

Overview of small business health insurance in Ohio

Ohio small business owners have many health insurance options available for their employees.

Employers frequently choose traditional group health insurance plans. Several types of these plans are available, including health maintenance organizations (HMOs), preferred provider organizations (PPOs), exclusive provider organizations ( EPOs), and point of service (POS) plans. The plans differ in flexibility and cost-sharing options, which is something that small business owners in Ohio need to think about.

But, unlike larger companies, small organizations often struggle to pay for group plans. They also might not reach the minimum participation requirements set by group policies. This often means self-insuring or forgoing benefits altogether. Instead, they can offer a defined contribution health plan like a health reimbursement arrangement (HRA).

An HRA allows employers to reduce costs and streamline administration. Employers reimburse employees for their individual health insurance premiums rather than purchasing group health insurance for them.

Small business health insurance options in Ohio

Small businesses and nonprofits face unique challenges with health insurance. Knowing the different options available can help employers choose what’s best for their employees and budget.

Here are several ways small businesses can offer health coverage to their employees:

• Traditional group health insurance
• Health reimbursement arrangements (HRAs)
• Health stipends
• Ancillary benefits, like dental and vision insurance, health savings accounts (HSAs), and flexible spending accounts (FSAs)

Group health insurance plans in Ohio

For many years, traditional group plans have been a popular option for organizations of all sizes. These plans offer a variety of coverage options, including medical, dental, and vision benefits. Typically, the employer and employees split the cost of the plan, with the employer paying a larger share of the monthly premiums. They can also extend coverage to spouses and dependents.

In Ohio, there are four main types of group plans:

• Preferred provider organization plans (PPOs): A PPO is the most common type of plan. It offers its policyholders access to a network of preferred healthcare providers. Members have the option to receive care from outside networks, but at an extra cost.
• Health maintenance organization plans (HMOs): HMO plans offer a range of healthcare services through their specific provider network. Employees who have HMO plans need to select a primary care physician (PCP). The PCP manages healthcare needs and gives referrals to specialists when necessary.
• Exclusive provider organization plans (EPOs): An EPO combines elements of both HMOs and PPOs. Members can use healthcare services from a designated network of providers without needing a referral to see specialists. The plan doesn't include care from out-of-network providers.
• Point of service plans (POSs): With a POS plan, in-network doctor visits are cheaper. You need a referral from a primary care physician to see a specialist, just like with an HMO.

The best plan type for you and your employees depends on your preferences and budget.

Group health insurance usually provides lower monthly premiums because the risk is shared among all the members. Usually, you need about 70% of your employees to sign up to meet participation requirements.

Employers and employees split the cost of premiums. According to KFF, employers usually cover 83% of premiums for self-only plans and 72% for family insurance premiums.

If the regular group health plan is too expensive for your organization, you might want to look into a high deductible health plan (HDHP). These plans provide lower premiums for both employers and employees. However, they have higher deductibles that employees must pay before the insurance company starts to help with the costs.

While HDHPs offer savings, the higher deductible might lead to increased costs for your employees. A potential option is to offer a group coverage HRA (GCHRA), also known as an integrated HRA, alongside an HDHP. With a GCHRA, you can reimburse your employees for their out-of-pocket costs, such as deductibles, tax-free. A GCHRA eases employee stress, saving money for everyone.

Small group health insurance plans from the Small Business Health Options Program (SHOP) marketplaces can also help you save money. Employers in Ohio with fewer than 50 FTEs can access SHOP plans. If you have fewer than 25 employees and they earn less than $50,000 annually, you may qualify for the Small Business Health Care Tax Credit.

The following companies will offer small group health plans in Ohio in 2025, according to HealthCare.gov’s rate review website.

The table below shows Ohio's lowest possible monthly SHOP premiums per employee.

Taking advantage of individual health insurance with an HRA

Employers have options beyond a standard group plan. They can use HRAs to reimburse employees for out-of-pocket medical costs and individual health insurance premiums, depending on the specific type of HRA.

Employers can save money by skipping a group plan. Instead, they offer a fixed monthly allowance that fits their budget and reimburses employees for their qualified medical expenses.

Silver-level individual plan premiums are generally a bit higher than small group plans in the state, but a marketplace plan can help you and your employees save on monthly expenses. You simply reimburse your employees for their health insurance premiums using an HRA.

Here are two types of HRAs that allow you to reimburse employees for their insurance premiums:

• The qualified small employer HRA (QSEHRA): In 2016, Congress created the QSEHRA so organizations with fewer than 50 FTEs can provide tax-free reimbursement for eligible health expenses and insurance premiums. The IRS sets a limit on maximum allowances and updates it annually to account for inflation. This option is good for small businesses and nonprofits looking to offer a first-time benefit or lower their premium costs.
• The individual coverage HRA (ICHRA): The ICHRA is for organizations of all sizes. It works like a QSEHRA but provides more flexibility and customization choices. You can contribute more to your employees than you could with a QSEHRA since there’s no set maximum limit. You can also differ allowances and eligibility with 11 employee classes. The ICHRA is a budget-friendly choice for companies looking to meet the employer mandate.

Offering an HRA is especially beneficial in Ohio. This is because individual premiums are cheaper than small group premiums in almost every county in the state. By reimbursing employees for individual health premiums instead, you’ll save money compared to a group plan.

According to Ideon, here’s the difference between small group and individual premiums in Ohio’s most populated counties: