October 8, 2019

Open Enrollment for HRAs is Coming: Huge News on the Employer Health Insurance Front!

This new legislation is changing the way that employers provide health benefits to their employees, tax-free!

Watch the video to see Jack explain how it all works.

We couldn’t be more excited for you! 

Debuting in January 2020, TCH’s new HRA technology platform is the first of its kind. It takes the hassle of providing benefits and healthcare reimbursement out of your hands and makes the healthcare process a simple exchange between TCH and your employees. All you have to do is tell them your business’ healthcare budget and they handle the rest!

As HR professionals, we’re excited because ICHRA represents a totally new, more efficient way for employers to provide health insurance benefits by simply reimbursing for individual claims rather than dealing with the stress of finding and implementing a traditional group plan. The TCH platform makes it easy to setup and administer your ICHRA plan passively. We at CEDR plan to integrate this platform into our own software early next year!

Here are a few highlights:

  • LEGALLY Reimburse employees tax-free for insurance (that’s tax-free for you and your employees!)
  • Customize reimbursements by employee class
  • Get set up and live in a matter of minutes
  • Seamless receipt tracking and reporting via mobile device
  • No setup fees
  • No long-term contracts
  • If you are growing towards or have 50 or more employees, this technology can work for your team, too!

There’s a lot more to cover about this exciting new healthcare option for employers. Watch the video above or read this blog on what HRA’s are and how they work for more details!

To learn more about how TCH can help you set up an HRA that works for your office on a budget you can afford, or to jump to the signup process, visit https://www.takecommandhealth.com/cedr-reimbursement.

Paul Edwards: 00:04 So wanna welcome everybody to today’s show. I want to introduce, but before I even get started, this show is all about Take Command Health, and health insurance – It’s that time of year everybody, when this is going out. I’ve just been talking to Jack Hooper and Jack, are you the CEO, the owner? What, what is your role at take command help?

Jack Hooper: 00:25 I am, I’m the CEO and founder of Take Command Health.

Paul Edwards: 00:29 So I love this, anytime I can have a founder-to-founder conversation, Jack. By the way, that’s one of my conditions about bringing people in and working with them is that I have to be able to have this kind of a conversation. It’s gotta be owner-to-owner and at any time, if I need to get you on the phone, or anybody that I’m working with that runs a company, I can pick up the phone and I know, that you’ll get back to me

Jack Hooper: 00:50 You know where to find us, yeah.

Paul Edwards: 00:52 And the same, you know, the same, same works for me so people can reach out to me as well. So, so you know, Jack is with Take Command Health and Take Command Healthy has systemized and software-ized, if that’s a word, the ability for your practice to leave your employees on the exchange. They’re out there getting their own health insurance. But Jack then makes it possible so that you can contribute. And one of the things that, you know, as an HR company that we learned early on was that those contributions — say you just went to an employee and you know, Jack, you know, we weren’t supposed to do this as employers: you just give them money and say, look, I’m, I’m giving you $200 a month or $300 a month or X amount of dollars a month. I’m adding it to your paycheck and you can go buy health care with it. And that sounds like a great solution. But it wasn’t exactly –

Jack Hooper: 01:49 Until you get the tax bill.

Paul Edwards: 01:50 Yeah. Until you get the tax bill and you had to pay the taxes on it. And it wasn’t exactly the legal, it was actually against some of the rules in the Affordable Care Act where if you were making a contribution, there had to be some accountability around that contribution. So Jack let’s just kinda jump in. We’re going to use the QSEHRA, the word, QSEHRA. We’re gonna use the word, you know, HRA, can you give us a little overview of what these things mean?

Jack Hooper: 02:19 Sure. Yeah. Thanks. Thanks, Paul, for having me on. You know excited to continue our relationship with CEDR and, and your clients. Talking about insurance, you know, there’s a lot of health insurance jargon. And HRA is one of those, you hear it with HSA and FSA and what does it all mean. So HRA is a Health Reimbursement Arrangement. Now typically they’ve been bolted onto a traditional group plan. So in the past you would offer let’s say your practice, you decide you want to offer group benefit. So you, the practice owner decide you went off for a Blue Cross policy or a Humana policy, you buy that for all your employees and you could attach an HRA on top of it to allow, it’s usually for medical expenses or out-of-pocket costs. What you need now though; these HRA’s can reimburse individual policies. So like you’re talking about, Paul, employees being able to stay on the public exchanges. We’d purchase their own plan. Now employers, instead of buying a plan for the group and say, I’m going to give everybody $300 a month tax free or $600 a month or whatever you want the budget to be, and we can put that under a nice tax-free umbrella and then employees can use it to go buy any plan they want. So that’s HRAs

Paul Edwards: 03:41 Is that tax free on both sides? So is it a tax free contribution to the employee as well? So it’s tax free for me and then tax free for them?

Jack Hooper: 03:49 Correct. Yes. It’s a tax deduction for the employer or a business expense. And then, that’s tax free. There’s no income tax or payroll tax that the employee has to recognize on it. I liked your idea before where you just give money, which seems really easy and nice, but the IRS would treat that as income

Paul Edwards: 04:09 And also your employee would sooner or later just treat it as income as well, not purchase health insurance with it. [Inaudible]

Jack Hooper: 04:17 Yeah.

Paul Edwards: 04:18 I think that one of the key things here, is the word you’re using is reimbursement. So how does that work when, so let’s just say I’m going to give everybody on my team $300 to go towards health expenses. And so, so tell me how that works on the reimbursement side.

Jack Hooper: 04:38 Yeah. Paul, you latched onto the operative word. There is, it is a reimbursement. So if you’re give everyone at CEDR $300 a month you know, employees use that to go purchase their own insurance. They can also get on Medicare or depending on the type of HRA, they might go put it towards their spouse’s plan.
So, there’s some flexibility there, but they, they go get, get their own coverage somehow, some way. And then have to submit a proof of coverage and claim a reimbursement. So the nice thing as a practice owner, is what we love about these new HRA’s, cause you can offer benefits, but if employees don’t claim it, then you don’t pay anything. So it’s, it’s really a, an efficient vehicle to make it, make it available. But if employees aren’t using it or don’t use all of it, then you don’t have to pay for it.

Paul Edwards: 05:32 I have so many questions, Jack. So many questions and so little time. So can my employees use it for something else health related, which isn’t health insurance? So let’s just say they, they wanna just, just bank on the fact that, you know, they’re young and dumb and they’re 23 years old and they’re, you know, they go to the, they go to the doctor like once a year when they’ve got tonsillitis or you know, a terrible sunburn for being at the beach and drunk laying on the, on the, on the sand for three days, whatever. They go to the doctor once a year. Can they take that money and can they get, can they participate in the plan and just pay their doctor and not have health insurance?

Jack Hooper: 06:10 So, so the rule number one with, with these HRA’s is employees have to be covered by something. Which is good because then you take that young, dumb 23-year-old and hopefully convince him or her that, Hey, I’m going to give you 300 bucks, but you gotta go buy a policy. And if they’re, if they’re 23, they can get a very affordable policy. Right. But then there’s some real options and flexibility on top of it. So you, you the practice owner can decide whether or not you want to allow medical expenses or just do premiums. Most of our clients, we recommend, you know, hey, go ahead and turn on medical expenses, that way, you know, back to our 23 year old getting $300. If he buys a $180 policy, all right, $180 a month is going to go towards this premium and now he’s got $120 left over for, you know, prescriptions, doctor visits, eyeglasses, copays. Exactly. And then the nice thing is if he doesn’t use it, it’s a great benefit. If he needs it, employer will never pay more than that $300. But if at the end of the year, it’s, people here are used to hearing, you know, use it or lose it, which are FSA’s, that’s a whole another conversation where the IRS takes it, right? With HRA’s we call it, kind of use it or don’t use it. You know, the employer makes it available, the employee doesn’t use it. Employer just keeps it. So there’s no loss.

Paul Edwards: 07:38 Right. So when the when the ACA came in, you know, all those years ago I had a little bit of a dog in the hunt. I had someone in my family who had a, a pretty serious ongoing condition, which required them to take, you know shots, which were about
$6,500 a month. And, and the health insurance, you know, the health insurance plans that we were in weren’t, weren’t going to cover any of that stuff. And I also had an employee who worked for me for several years and she had been, you know, sick, had cancer, lost her job, lost her savings, lost her home. She was back in the job market eight years later, you know, thankfully healthy. She’s still healthy today. And we couldn’t get affordable healthcare for her. She, she couldn’t get it individually. I mean, it was literally $2,100 a month.

Paul Edwards: 08:30 And, and because we were such a small company back then and had fewer than six employees it was really hard to get insurance. So I, you know, when the ACA came in, I saw it as a good first step. I had hoped you know, as business people do, like you and I do Jack, we start something and, and it doesn’t look the same 10 years later we worked very hard and we, you know, we to let go of some things that we thought were going to work. We have to you know, swallow some things that we, that we said we’d never do, but we make our businesses work and I’d hope the plan, the, the ACA would work that way. But this looks like, this looks like the, you know, some of the planning that was done inside of QSEHRA as the previous administration was going out, it looks like it’s all coming to fruition now where they really are taking care of us as small employers and they’re saying, look, you don’t have to get in the, in the healthcare game. You don’t have to do that. You can just be outside. Jack, what’s your take on this stuff, man?

Jack Hooper: 09:34 Yeah, you’re exactly right. So what makes this model work? And this is a, you know, really is because of the consumer protections on the individual market. You know, HRA, these types of HRA’s don’t work. If, you know, in your example, Paul you know, someone with a preexisting condition, if they were to try to, you know, before ACA, buy a plan, they would be denied on road. So you have to do these group things. But now because they can go get a policy and they are protected against preexisting conditions you know, it’s a great way to contribute to them and give them the flexibility to go get the plan that they need. And as you mentioned, being an employer, being able to support employees without having to choose a plan for them or, or kind of get in the insurance game, you could say, Hey, here’s, here’s some money.

Jack Hooper: 10:28 We’re here to help. This is a benefit for you. If you need the Blue Cross plan, you can get it. If you need the AETNA plan, you can get it. And, and obviously has all this consumer protection. You brought up another interesting point though about the history of these HRA’s. You know, with obviously the state of
our, you know, politics and healthcare being quite a bit of a political football, HRA’s, I feel like the one area where there is a lot of agreement between Republicans and Democrat. So, the QSEHRA we’ve mentioned, stands for Qualified Small Employer Health Reimbursement Arrangement. It was the last act of Obama administration. So the very last bill that they signed is the QSEHRA and then just this summer, the Trump administration has kind of taken it one step further and announced what we’re calling the Individual Coverage HRA, or ICHRA, [inaudible], but it really builds on QSEHRA and provides a lot more flexibility and that becomes available on January 2020. So you know, for all the political upheaval and frustration on, in the healthcare arena, it feels like HRA’S are a safe bet. And really when you take a step back, it makes a lot of sense, right? Why can’t I, as a business owner, as a practice owner, I should be able to pitch in a few hundred bucks to help my employees buy health insurance and, and not have just hassle with administering a plan. I have the hassle of taxes. Just so much better. It makes sense.

Paul Edwards: 11:57 Yeah, no it makes absolutely, it makes great sense. I’ve, I’ve said this many times, why am I, as an employer in, in the health insurance business for my employees? Why am I involved at all? I don’t, I don’t, it shouldn’t be my job. Now I understand, you know, the, the level of need for employers to support this. I love this approach that you guys have figured out and I love that you systemized it. Now trust me, I’ve been all through your system. I’ve been playing with your software. And, and it’s just super easy to use and it looks to me like you guys are, obviously you’re governed by these rules that are coming into place, but it looks like you’re adding more and more services, making it easier and easier and easier. And frankly, Jack, I’ve been recommending you guys now for over a year and I’m hearing nothing back but good about Take Command, about your team, about the program, about the, this low administrative cost per employee for you to you guys to just take this headache off their plate. I just want to thank you. I just really want to tell you you’ve done something really good here.

Jack Hooper: 13:07 Ah, thanks Paul. Yeah, we appreciate it. And, and you know, loved working with CEDR. I think what makes it work well is having the connectivity, you know, with kind of HR expertise. You know, if you’re a practice owner you know, you’re juggling a lot, right? You, you’ve gotta manage your office and you’ve got to manage your patients. And you know, you’ve probably got some part time or full time help that you know, they’re, they’re asking about benefits and the idea of battling with a traditional group plan when you’ve got mix of part time and full time and,
and, you know, maybe just a handful of employees, doesn’t make sense? And, and that’s where we really designed our solution is, is kind of for that small practice owner in mind. You know, setting up an HRA sounds like, Oh my gosh, there’s tons of legal complicated stuff.

Jack Hooper: 13:57 Takes about two minutes. We do all that for you and, and handle all the IRS notices and accounting. Employees just take pictures on their smartphone of any bills and receipts. And then we push it, push the reimbursement through as a tax free item on, on their next paycheck. So our goal and design has actually always been to take, take the headache and hassle for the practice owner out of the equation. Let’s get it set up, let’s design it how we want, let’s make it fair and compliant and then take a step back. And then we’ll work with your employees, make sure that they love it, but they understand how it works. And you know, the results have, have been really encouraging with, you know, it’s a good, it feels like a real benefit for an employee. Even if you’re just giving two or 300 bucks a month, you know, they go pick up a prescription for their child. They take a picture on their phone and they get reimbursed on their paycheck. It’s just a great, it’s just a really great flexible benefit employees really love. So it’s been, it’s been fun working with CEDR clients.

Jack Hooper: 15:01 Awesome. So, my clients, look, I have everybody out there from, I, I mean I actually have some folks out there as members who have one employee. You know, we run the gamut for two or three employees all the way up to 300 employees. I mean, we, we’ve got everything there. I think the sweet spot average is, you know, nine to 15 employees. I got plenty out there that have, you know, in the mid-twenties and thirties. So where is the cutoff for this? Where, is there, is there a cutoff where this planning doesn’t, doesn’t, can’t come into play?

Jack Hooper: 15:31 Yeah, great question. So currently, as in 2019 you know, the cutoff is 50 employees. But that was one of the things that’s been expanded. So with kind of the Trump administration, surprisingly building on some policies from the Obama administration so starting in 2020, the handcuffs come completely off where it can be used for any size employer and satisfy as a corporate mandate if you’re over 50 employees and it can accommodate all sorts of different reimbursement structures. So currently right now we’re limited to one reimbursement level and you can choose to include or exclude part time employees or seasonal employees. Starting in 2020, we’ll actually build a design different solutions for, so you could give your part time employees in dislocation, $300 a month and
your full time employees $1,000 a month. You can even mix and match it with traditional group plans. And, you know, really I think what the biggest story for employers will be, is just as long as it’s fair, you know, and I think most, most your clients have good intentions in mind. As long as it’s meant to be offered fair. We can almost design anything. You know, the, the, it’s a very open canvas to design a solution to fit whatever needs you know, you have as an employer.

Paul Edwards: 16:59 I love that. I didn’t know that it was going to expand to the over 50. So everybody, I just learned, I just learned something new here as well. As a, as I, I know several of you are learning lots of new stuff during this conversation with Jack. So Jack the, I think the last thing that we want to talk about today is what do they need to do? I, I mean, first of all, and I’ll tell you, you need to call Jack’s team and you need to let them know that you’ve come in from CEDR and that you saw this call and say I saw Paul and Jack talking and I want more information. Jack, where do they go to get more information? What do they need to do?

Jack Hooper: 17:33 Great question. So, you know, step one is your, your CEDR reps should, should know about this. So that can always be a great place to start. And they- we’ve, we’ve trained them a little bit so they can tell you, hopefully, yes or no. Hey, this is a good idea. No, it’s not the pursuit. [Inaudible]. They know. So they may not be the full experts on it. But that’s okay. They can help you get started too. That’s a great way to start. The second way is, as Paul mentioned, takecommandhealth.com is our website. And if you come through that way, just let us know that you’re a CEDR employee. There’s some discounts associated with it. So you’ll, you’ll definitely, excuse me, a CEDR client. There’s some discounts we’re able to share because of that. Definitely want to let us know. But then our, our, our HRA design team knows CEDR well and we know how to kind of link that to your, to your accounts there. So either through your CEDR rep or directly through takecommandhealth.com. Hopefully we’ll be able to put a link under this broadcast or something. That’d be great.

Paul Edwards: 18:40 Yup. And so Jack, anybody who has access to this link and, and has gotten this recording can give you a call, whether a member of mine or whether or not they’re a part of our Facebook group or, or wherever they are, no matter who you are. Jack and I are on a mission, we’re trying to get, we’re trying to get employers out of the line of fire of having to manage a health insurance for their teams because it’s just cost so much to even stop and deal with it for a couple of months while you’re trying to figure it out. And, and we’re empowering your employees to be able to pick the plans that make sense to them and you to fix your cost.
That’s the biggest thing is, is this is what my contribution is and this is how it can be used. And it’s all done through software and, and through the employees with Take Command Health.

Jack Hooper: 19:28 If I, if you’ll permit me a quick story, Paul. So we were meeting with an eight person dental client about two weeks ago. And poor guy, who really was trying to do right by the employees, but it was kind of renewal for their group health plan. And again, and he was just stressed out to the max because his receptionist, you know, her son, you know, had some additional care needs. But, but another, another employee didn’t want to change doctor networks you know, and was just causing all sorts of, kind of, headache and burden falling on the, the the dentist who’s just, you know, he’s just trying to provide benefits and kind of keep the staff happy, but, but being able to accommodate all these things was very confusing with the old context. And he’d gotten a bunch of different quotes from Humana and Aetna and Cigna and was trying to make sense of it.

Jack Hooper: 20:20 And what was nice was being able to sit down with them and say, well, you know, Doctor, what’s, what’s your budget for benefits? And he said, I want to do $400 a month, is what I’d like to pay. And it’s like, great, you’re done. Let’s, let’s plug it in, we’ll drop the document and then we’re going to help each employee, you know, the receptionist’s needs Blue Cross and the dental hygienist needs Aetna. You know, we’re going to connect everyone with the right plan that they need. And now, as you’re alluding to Paul, that the burden is totally off and he can provide a great benefit and get back to being a dentist and not a health plan administrator. So it was a great win.

Paul Edwards: 20:59 So Jack, can you help the employees actually pick a plan if they don’t have a plan yet? Is that something that your company helps with?

Jack Hooper: 21:08 Yeah. I forgot to mention that too. So we handle the HRA and then we also have a private individual health insurance exchange. So we pull in all the options from healthcare.gov or, or the local state exchanges. But then we also have some additional plans that that may not be found. They’re usually called off exchange plans and they’re not some like secret magic sauce to them, but sometimes they are a little bit broader network or a little bit less expensive. And then, and then we have some cool tools where employees can search for their doctors and prescriptions and we’ll, we’ll help connect them to the right plan that’s going to have their doctor cover their prescriptions the best. It’s pretty cool. You get a really
optimized tailored thing and most employees end up liking it more than, you know, big group plans they’ll never use or they didn’t, didn’t have a hand in choosing.

Paul Edwards: 21:59 Yeah, or didn’t understand it. That’s about half of our problem is. Yeah. Yeah. So, so everybody Jack again, what’s the website?

Jack Hooper: 22:10 takecommandhealth.com

Paul Edwards: 22:12 And, and the best phone number for them to reach you

Jack Hooper: 22:16 Is, ah well, the best way is actually on our website. There’s a call scheduler, so that’s probably the best way. That way we can make sure to accommodate you and you’re not on hold [inaudible] if you’re busy at your practice. We don’t, don’t want to be playing phone tag.

Paul Edwards: 22:31 Okay. Absolutely. Perfect. So everybody, you heard it here, get in touch with Jack and his group, go to the website, schedule yourself in. Go ahead and do it now because I know he’s going to be super busy cause I’m sending this to all of my members and all, all of the people who are in all of our groups. So I know, I know you’re a busy man, Jack. So everybody get in there. You get a personal conversation with Jack. No, I’m just kidding.

Jack Hooper: 22:55 He will come to your house, [inaudible] your children.

Paul Edwards: 22:59 Jack, thank you so much. It’s been really informative. I learned some new stuff today and again, thanks. Thank you so much for helping our members out.

Jack Hooper: 23:09 Oh, thank you Paul. And thanks to the CEDR team, we’ve really enjoyed working with you all

Paul Edwards: 23:31 Awesome.

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.


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Please note: CEDR Solutions specializes in providing expert HR support to owners and operators of independently owned medical and dental practices.