Navigating Health Insurance Options for Employers and Individuals

The Importance of Health Insurance Decisions

Offering or enrolling in health insurance is a critical decision for both employers and individuals. The process can be especially daunting for small businesses without dedicated HR support or a benefits specialist. However, investing time and effort into establishing a formal health benefit plan is ultimately rewarding.

Advantages of Employer-Sponsored Health Insurance

Providing an employer-sponsored health insurance plan offers several key benefits. It helps attract and retain employees, distinguishes your business from competitors, and promotes a healthier, more satisfied workforce.

Exploring Health Insurance Options

In this article, we'll list the top 25 U.S. health insurance companies by market share and discuss alternative coverage options that may offer more cost-effective and flexible solutions than traditional group health plans.

Understanding Traditional Group Health Insurance

Employers typically seek group health plans when comparing insurance providers. Before exploring the top health insurers, it’s important to understand the basics of traditional group health insurance.

Traditional group health insurance involves an employer selecting a medical plan for the organization and offering coverage to employees and their dependents at a reduced rate. Many insurers require a minimum 70% employee participation rate to qualify for coverage.

Various plan types are available, including Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). Employees contribute a portion of the premium and must meet their annual deductible before the insurer starts sharing medical costs.

Employers can purchase group health policies directly from insurance carriers, agents, or brokers. Small businesses can also explore options on the Small Business Health Options (SHOP) marketplace, which may include the Small Business Health Care Tax Credit to reduce premiums.

While traditional group health insurance remains popular due to familiarity, its rising costs may be prohibitive for smaller businesses.

Alternatives to Group Coverage

Group health insurance is not the only option for securing health coverage. Individuals can also purchase their own policies through the Health Insurance Marketplace or state exchanges, with many of the same insurers offering both group and individual plans.

Top 25 U.S. Health Insurance Companies by Market Share

If you’re considering a group health plan or an individual policy, knowing which health insurance companies are credible and offer a range of products is crucial. Below are the top 25 U.S. health insurance companies ranked by market share, based on data from the National Association of Insurance Commissioners (NAIC):

1. UnitedHealth Group - 15.34%
2. Elevance Health Inc. (formerly Anthem) - 7.16%
3. Centene Corp. - 6.68%
4. Kaiser Foundation (Kaiser Permanente) - 6.18%
5. Humana - 6.03%
6. CVS Health (including Aetna Health) - 5.82%
7. Health Care Services Corporation (HCSC) - 3.53%
8. Cigna Health - 2.39%
9. Molina Healthcare Inc. - 1.99%
10. GuideWell (including Florida Blue) - 1.84%
11. Independence Health Group Inc. - 1.76%
12. California Physician's Service - 1.40%
13. Highmark Group - 1.32%
14. Blue Cross of California - 1.15%
15. Blue Cross Blue Shield of Michigan - 1.11%
16. Blue Cross Blue Shield of New Jersey - 1.11%
17. Caresource - 0.93%
18. UPMC Health System - 0.90%
19. Blue Cross Blue Shield of North Carolina - 0.79%
20. Carefirst Inc. - 0.70%
21. Metropolitan - 0.69%
22. Point32Health Inc. - 0.63%
23. Health Net of California, Inc. - 0.63%
24. Local Initiative Health Authority - 0.61%
25. Blue Cross Blue Shield of Massachusetts - 0.60%

Market share size reflects a company's competitiveness, financial health, and structural stability. Insurers with larger market shares manage higher premium volumes and may offer more extensive provider networks.

Premiums in the Health Insurance Industry

In 2022, U.S. health insurers collectively earned approximately $1 trillion in net premiums, marking an 11.4% increase from 2021. UnitedHealth led with about $221 billion in premiums, while Blue Cross Blue Shield of Massachusetts earned $8.6 billion.

Given the expected rise in healthcare needs due to inflation and an aging population, offering a diverse range of health insurance options can help employers better attract and retain employees.

Why HRAs and Health Stipends Are Viable Options for Small Employers

For small and midsize businesses, budgeting for group medical insurance can be challenging as premiums continue to rise. Fortunately, Health Reimbursement Arrangements (HRAs) provide a flexible and cost-effective alternative.

HRAs allow employers to reimburse employees for out-of-pocket medical expenses, health insurance premiums, and other healthcare costs on a tax-free basis. Employers set a monthly allowance, and employees are reimbursed up to this amount after making qualifying healthcare purchases.

HRAs offer customization, enabling businesses to provide employees with greater flexibility and control over their healthcare benefits at a manageable cost.

Alternative Health Benefits for Your Organization

Here are four HRA options that might be right for your organization:

• Qualified Small Employer HRA (QSEHRA): Designed for employers with fewer than 50 full-time employees, QSEHRA allows employers to set an allowance within annual contribution limits. Employees can then choose their insurance policies and out-of-pocket medical expenses. Reimbursements are tax-free for employees with policies that meet minimum essential coverage (MEC) requirements.

• Individual Coverage HRA (ICHRA): Suitable for employers of all sizes, ICHRA offers no contribution limits and can be used as a stand-alone benefit or alongside a group health plan. ICHRA is customizable, with different allowance amounts set for various employee classes.

• Integrated HRA (Group Coverage HRA): For employers offering a group health plan, the Integrated HRA supplements benefits by reimbursing employees for eligible out-of-pocket expenses. This option provides control over healthcare costs while maintaining group plan coverage.

• Health Stipend: A more flexible option, health stipends provide a flat amount for employees to spend on health-related expenses. While stipends are taxable, they offer broad flexibility and are easier to administer, especially for small businesses.

How PeopleKeep Can Simplify Benefits Administration

Administering HRAs can seem complex, but PeopleKeep’s employee benefit administration software makes it simple. Our platform streamlines the process, from designing your benefit plan to managing reimbursements, ensuring compliance, and providing customer support.

Conclusion

While traditional group health insurance plans remain a popular option, it’s important to explore more flexible alternatives like HRAs. These options provide affordable health benefits and give employees greater autonomy over their healthcare choices. If you're considering an HRA for your organization, we're here to help you get started.