ResourcesSmall Business Health Care Hub by JPMorganChase
How to fund your health insurance plan
Funding refers to who is responsible for paying for health care costs if costs end up being higher than expected. Depending on the option you go with, this can be the insurance company, you as the employer, or a combination of both. There are many options to fund your health insurance, including new options you may not have previously considered. Some may require you to make tradeoffs on the cost, plan design flexibility and financial risk your business is willing to take on.
Your decision will hinge on factors like your company's size, risk tolerance and financial strategy.
Explore your options
Group funding options
Think of this as a one-size-fits-all approach to health insurance. Your business chooses a single plan for everyone and covers the cost, so everyone gets the same coverage and benefits. There are several ways to fund your business's health insurance, like fully insured or self-funded, each with its own costs and flexibility.
Explore other options
Many businesses tend to start with fully insured plans, but they are just one of many choices. Other options, like level and self-funded plans can provide greater flexibility and potentially align better with your business needs.
Explore funding options
Individually funded HRA options
Here, you give your employees money to buy their own health insurance. It's flexible and low financial risk for your business, but some employees might still like having a company plan.
All-new ICHRA NEW OPTION
A new coverage option, Individual Coverage Health Reimbursement Arrangements (ICHRAs), allow employees to purchase their own insurance with tax free contributions from their employers. This approach offers flexibility and low financial risk for your business, though some employees may still prefer a company-sponsored plan.
Learn more about HRAsUnderstanding business size requirements
When you're choosing a health insurance plan for your business, you have to determine the number of full-time employees (FTEs) in your business, which can be complicated if you have seasonal, part-time or other contract workers.
Why does business size matter?
Plans are often bucketed into “small group” or “large group” plans. A "small group" usually means a business with 1 to 50 full-time employees, not including the owner. Some states define "small group" as up to 100 employees. Size also determines regulatory requirements and correlates with the level of financial risk you may be able to take. Find resources for your state on the State Resources page.
How many employees do I need to provide a group plan?
Generally, you need at least one full-time employee who is not the owner or the owner's spouse/partner. Specific requirements and definitions can vary by state. Find resources for your state on the State Resources page.
Need help figuring out your FTEs? You can use the FTE Calculator on IRS.gov to make it easier.
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