Do you have to break up together with your group well being advantages?
If you happen to’re sad together with your group plan or simply interested in different choices, listed here are some issues for transferring on and why an HRA is likely to be higher for your corporation.
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 insurance, and the price 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 value has skyrocketed, making it a serious P&L drain for employers.
| Yr | 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 price range concern. Since 1999, employer medical insurance prices have tripled relative to worker pay.4
Since 1999, employer medical insurance prices have tripled relative to worker pay.
The ache factors of group medical insurance
As a result of group medical insurance has lengthy been the default possibility, many companies have used it however struggled with the prices. What began as a handy means to supply well being advantages has grow to be an costly, unsustainable burden.
Excessive prices: Along with the gradual value will increase over time, astronomical price hikes have grow to be the norm for group medical insurance carriers.5
Unpredictability: These price hikes aren’t predictable, so a enterprise isn’t in a position to plan their price range 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 can even impose a fantastic or tax penalty.
Worker dissatisfaction: Group advantages supply a single possibility: a one-size-fits-all plan. Which means whether or not an worker is 25 or 50, wholesome or sick, all of them get the identical protection. When compelled into one mildew, staff will be dissatisfied and even select to go away.
In 2025, employers paid almost thrice 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 insurance service. What’s working? What’s not? What do you need to be totally different? Discuss to employees, HR, and finance for suggestions.
Step 2: With that perception in place, run a price/profit evaluation of your group plan. If you happen to’re working with a dealer, this can be a nice time to have interaction them.
Step 3: Evaluation your contract for termination clauses, so that you’re conscious of your timing choices must you resolve to modify group medical insurance.
Step 4: If you happen to’re contemplating an HRA to exchange your group plan, take our HRA quiz to seek out out what would work finest for you, use our tax-savings calculatorand study HRA particular enrollment intervalstogether with mid-year plan modifications. You can too join with an HRA specialist to speak via 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 price range, and the staff purchase healthcare plans from the ACA or state market.
A value-controlled different 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 insurance however are uncertain of the alternatives (or if there are any). A Take Command HRA is a cost-controlled different to group insurance coverage that takes a totally totally different strategy. It’s a contemporary well being advantages mannequin that permits employers to supply cost-effective, versatile, personalised protection.
Advantages of a Take Command HRA
Price range management: With a Take Command HRA, you set the price range. No shock price hikes, no renewal jumps. You select the allowance to offer staff every month, and it solely modifications if and while you need it to. Which means you management your prices all the way down to the penny, and you may forecast with 100% accuracy.
Worker alternative: An HRA is designed for workers to decide on the well being plan they need. It’s not a trouble—it’s supposed that means. A 25-year-old should purchase a high-deductible plan and a 50-year-old should purchase one with a decrease deductible. There may be full flexibility for everybody to get what works finest for them.
Streamlined course of: Our HRA administration platform streamlines processes and reduces paperwork, making it a win for admin. Your HR group now 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 group room to breathe and concentrate on different priorities.
Versatile choices: Take Command has HRAs for small companies, mid-market corporationsand enterprise firms. Every possibility satisfies regulatory necessities for medical insurance. Along with choices for each dimension enterprise, it’s also possible to use worker lessons to designate distinctive allowances for various worker teams.
Partaking your dealer
Take Command works with 1000’s of medical insurance brokers all through the U.S. If you happen to’re working with a dealer, we’re blissful to talk with them about whether or not an HRA could be a great match. You possibly can move alongside our dealer toolkit or ICHRA for brokers.
Hold studying
The brand new advantages different to group medical insurance
Group medical insurance does not work for each firm. If you happen to’re seeing massive will increase yr over yr, you have bought a danger downside. Fortunately, there’s a simple different to group plans that gives fashionable, personalised 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 suggests an employer can undertake an ICHRA plan at any time of the yr and their staff will have the ability to enroll in a qualifying plan instantly as an alternative of ready for the subsequent open enrollment interval.
HRA particular enrollment intervals and mid-year plan modifications
For brokers: why your purchasers ought to rethink group well being plans
Did we point out that medical insurance will be complicated and irritating? It retains HR up at night time 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 study 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/
