9 Health Insurance Acronyms that are Good to Know for Small Business Owners

If you’re a small business owner like me, you might have come across some confusing health insurance terms and acronyms. Well, worry no more! I’ve got you covered. Here are 9 important acronyms that you should be familiar with:

1. HMO – This stands for Health Maintenance Organization. It’s a type of health insurance plan where you choose a primary care doctor within a network to manage your healthcare. They will refer you to specialists if needed.

2. PPO – PPO stands for Preferred Provider Organization. With this plan, you have the freedom to choose any healthcare provider you want, even if they are out of network. However, staying in-network will usually lead to lower costs.

3. EPO – EPO stands for Exclusive Provider Organization. It’s similar to a PPO, but you must stay in-network for coverage, unless it’s an emergency. Referrals are not required for specialists.

4. POS – POS stands for Point of Service. In this plan, you choose a primary care doctor within a network, like an HMO. However, you also have the option to go out of network, but it will cost you more.

5. HSA – HSA stands for Health Savings Account. It’s a special type of savings account that allows you to set aside pre-tax money for medical expenses. The funds roll over from year to year, so you can keep saving for future healthcare needs.

6. FSA – FSA stands for Flexible Spending Account. Like an HSA, it’s also a pre-tax savings account for medical expenses. However, unlike an HSA, the funds must be used within the plan year or you will lose them.

7. COBRA – COBRA stands for Consolidated Omnibus Budget Reconciliation Act. It allows you to continue your health insurance coverage for a period of time after leaving a job or experiencing certain life events, but you will have to pay the full premium.

8. ACA – ACA stands for Affordable Care Act. It is a law that was put in place to improve access to quality health insurance and healthcare options for individuals and small businesses.

9. IRS – IRS stands for Internal Revenue Service. This is the government agency responsible for collecting taxes, including the penalties associated with not having health insurance, as mandated by the ACA.

I hope these acronyms make navigating the world of health insurance a little less confusing for you. Stay informed and take charge of your small business’s healthcare benefits!

I’m going to talk about a bunch of health insurance abbreviations that are used a lot nowadays. Back in the day, there were basically only two options for health care. There was regular group health insurance, and for older folks, there was Medicare. But now, there are lots of different options available, some of which are specifically for small businesses. The problem is, there are so many different names and acronyms for these options that it can get pretty confusing.

Health Insurance Abbreviations for Small Businesses

Let me give you a list of health insurance abbreviations that you need to be familiar with:

ACA (Affordable Care Act)

I want to talk about this really important law that was put into place. It’s called the employer mandate, and it requires big companies with 50 or more full-time employees to give their workers affordable health coverage. If they don’t, they have to pay a penalty.

Now, there used to be a rule for individuals too, where if you didn’t have health coverage, you would have to pay a penalty. But that rule has changed, and there’s no penalty anymore. However, for companies, the mandate is still in effect.

Let’s talk about AHPs (Association Health Plans)

There was this order from the people in charge in 2017, and they said that associations, like trade groups and chambers of commerce, could offer health coverage to their members, no matter where they were. But then, a court decided that these plans were breaking the rules of the ACA. The people in charge have appealed the decision, and they also said that they won’t go after companies who relied on the rule in good faith.

ALEs (Applicable Large Employers)

Let me tell you about ALEs. These are employers who have at least 50 or more full-time and full-time equivalent employees. The cool thing is, they have to follow certain rules called the employer mandate.

COBRA (Consolidated Omnibus Budget Reconciliation Act)

Now, let me explain what COBRA is all about. It’s not the actual health coverage, but a law that made it possible. COBRA lets you stay in your employer’s group health plan even if you leave the company (except for when you’re let go for really bad behavior). But here’s the catch – it’s only offered by employers with 20 or more employees. Some states even have their own version of COBRA for smaller companies.

EBHRAs (Excepted Benefit Health Reimbursement Accounts)

I’ve got some exciting news for you about a new rule that’s coming in 2020. I’m talking about something called EBHRAs, and they’re going to make your health coverage even better.

So, what’s an EBHRA? Well, it’s a fancy term for an employer-funded plan that you can use to add to your existing health coverage. If your employer offers traditional health coverage, they can now offer you an EBHRA to help cover some extra costs.

With an EBHRA, you can use the money to pay for things like co-pays, deductibles, and even those non-covered items like dental and vision care. It’s a great way to get some extra help with your healthcare expenses.

Now, you might be wondering how much money you can get with an EBHRA. Well, in 2020, the dollar limit per employee account is $1,800. That’s a pretty nice chunk of change to help with your healthcare costs!

Now, let’s talk about HDHPs (High-Deductible Health Plans).

HDHPs are a specific type of group health plan. What makes them different is that you have to pay a certain amount of money (called a deductible) before your insurance coverage kicks in. The cool thing about HDHPs is that the premiums are usually lower than traditional group health plans.

But here’s the best part – having an HDHP is a requirement if you want to have something called an HSA (Health Savings Account).

So, what’s an HSA?

Did you know there are special types of accounts that are similar to IRAs? They’re called HSAs, and they have some pretty cool benefits. First of all, when you put money into an HSA, you don’t have to pay taxes on it. That means you get to keep more of your hard-earned money. And not only that, any earnings you make from your HSA investments also aren’t taxed. It’s like you’re growing your money tax-free!

But the best part is yet to come. When you need to use your HSA to pay for qualified medical expenses, you don’t have to pay taxes on that money either. Yep, that’s right, tax-free withdrawals for medical expenses. It’s like getting free money to cover your healthcare costs!

There’s just one catch though. HSAs can only be used by people who have a High Deductible Health Plan (HDHP). So if you have one of these plans, you’re in luck! You can take advantage of all the tax benefits and use your HSA to save money on healthcare.

Now, let’s talk about the annual limits. The amount of money you can contribute to your HSA each year is capped. But don’t worry, the limits are different depending on whether you have individual coverage or family coverage. So you can choose the option that works best for you and your family.

But wait, there’s more! Let me introduce you to another type of account called ICHRAs (Individual Coverage Health Reimbursement Accounts).

I have some exciting news for you! The IRS, DOL, and HHS have just issued a final rule that will make a big difference starting in 2020. Now, even if your employer doesn’t offer a group health plan, they have the option to reimburse you for your individually-purchased health insurance. This includes insurance you get from a government Marketplace or Medicare. The best part is, your employer gets to decide how much they will contribute towards your insurance.

To make sure you get reimbursed, all you need to do is provide proof that you have coverage. It’s as simple as that! This new rule applies to all employers, whether or not they are required to provide insurance. However, there are some special rules for large employers.

Let me tell you about QSEHRAs (Qualified Small Employer Health Reimbursement Accounts)

In 2016, the 21st Century Cures Act created these special accounts. They are designed for small employers who are not considered large employers. Even if they don’t offer a group health plan, they can still help their employees by reimbursing them for their personal health insurance premiums, up to certain limits. For 2020, the limits are $5,150 for individual coverage and $10,450 for family coverage.

A Lasting Idea

Now is the time for small business owners like me to start thinking about how we will take care of our health next year. It’s important to remember that the time to sign up for individual coverage in 2020 is from November 1st, 2019 to December 15th, 2019. And if you’re on Medicare, the enrollment period is from October 15th, 2019 to December 7th, 2019.

If you’re feeling unsure about what to do, don’t worry! I suggest talking to a benefits expert who can help guide you towards the best health coverage option for your specific situation. They’ll make sure you’re taken care of.