The Utah Health Exchange - An Option for Employers!
As early as 2005, Utah realized that health care reform was needed, and began to make sweeping changes in the state's health-care system.
In 2008 the critical legislation HB 133 was passed forming what is now known as the Utah Health Exchange.
The Exchange is designed to be a cloud-based marketplace where consumers can shop various health-care options and find what works best for their unique situation.
Originally rolled out in January 2010 on a pilot program, January 2011 launched the first enrollment opportunity for most small employers.
Based on information released from the State of Utah as of March 7th, the Exchange has successfully enrolled 83 employer groups and 2,534 covered lives.
The Exchange is, essentially, a defined contribution program.
Employer groups enroll in the Exchange using the broker or advisor they choose to assist them to navigate through the process and assist in educating their employees of their options.
Enrollment is essentially done on a web-based platform designed for health care shopping and enrollment.
Can My Business Participate? To be an eligible small employer, you must have between 2 to 50 eligible employees; at least 75% of them must reside in Utah; and you must fill out an online application, including submission of eligible documents.
Once an offer is established the group must have 75% participation of eligible employees.
Once you've applied, you'll work directly with your broker or advisor to walk you through the process.
What about a Section 125Plan? In order to participate in the Utah Health Exchange, employers are required to provide payroll deduction on a pre-tax basis through a Section 125 Plan.
This document allows the employee portion of the premiums to be deducted completely pre-tax.
The major benefit of a Section 125 Plan (also known as a cafeteria plan) is its tax-advantage status.
They are deducted pre-tax, meaning that the employee's taxable income is reduced by the amount of the premium.
As a result, the employee has a lower taxable income, and therefore lower FICA and Medicare taxes payable.
The employer gets a benefit, too: the lower employee taxable income means a lower employer share of FICA and Medicare taxes, and can also mean lower FUTA and state taxes.
What is the Default Plan? The employer and advisor must choose a default health plan for his employees, and enroll them in the default plan, unless:
The Utah Health Exchange has a lot of moving parts and is certainly not the right fit for all employers.
As of March 7th, less than 10% of the employers opting for the Exchange were offering benefits for the first time.
Insurance and the regulation surrounding these offerings can be a daunting task; make sure you have a great advisor to hold your hand through the process.
Also make sure you have a Section 125 Premium Only Plan that is flexible and provides automated compliance.
In 2008 the critical legislation HB 133 was passed forming what is now known as the Utah Health Exchange.
The Exchange is designed to be a cloud-based marketplace where consumers can shop various health-care options and find what works best for their unique situation.
Originally rolled out in January 2010 on a pilot program, January 2011 launched the first enrollment opportunity for most small employers.
Based on information released from the State of Utah as of March 7th, the Exchange has successfully enrolled 83 employer groups and 2,534 covered lives.
The Exchange is, essentially, a defined contribution program.
Employer groups enroll in the Exchange using the broker or advisor they choose to assist them to navigate through the process and assist in educating their employees of their options.
Enrollment is essentially done on a web-based platform designed for health care shopping and enrollment.
Can My Business Participate? To be an eligible small employer, you must have between 2 to 50 eligible employees; at least 75% of them must reside in Utah; and you must fill out an online application, including submission of eligible documents.
Once an offer is established the group must have 75% participation of eligible employees.
Once you've applied, you'll work directly with your broker or advisor to walk you through the process.
What about a Section 125Plan? In order to participate in the Utah Health Exchange, employers are required to provide payroll deduction on a pre-tax basis through a Section 125 Plan.
This document allows the employee portion of the premiums to be deducted completely pre-tax.
The major benefit of a Section 125 Plan (also known as a cafeteria plan) is its tax-advantage status.
They are deducted pre-tax, meaning that the employee's taxable income is reduced by the amount of the premium.
As a result, the employee has a lower taxable income, and therefore lower FICA and Medicare taxes payable.
The employer gets a benefit, too: the lower employee taxable income means a lower employer share of FICA and Medicare taxes, and can also mean lower FUTA and state taxes.
What is the Default Plan? The employer and advisor must choose a default health plan for his employees, and enroll them in the default plan, unless:
- The employee chooses their own plan option online with a different plan through the Exchange.
- The employee waives coverage and can prove health insurance coverage elsewhere.
- The employee specifically declines coverage in the health benefit plan.
The Utah Health Exchange has a lot of moving parts and is certainly not the right fit for all employers.
As of March 7th, less than 10% of the employers opting for the Exchange were offering benefits for the first time.
Insurance and the regulation surrounding these offerings can be a daunting task; make sure you have a great advisor to hold your hand through the process.
Also make sure you have a Section 125 Premium Only Plan that is flexible and provides automated compliance.
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