Alternatives to Small Group Insurance Plans for Employees
Table of Contents
As a North Carolina business owner, you know health insurance costs keep going up. Every year, group coverage takes a bigger bite out of your budget. You want to help your employees, but the numbers have to make sense.
Here’s some good news: You have more options than ever before. These alternatives to group insurance plans for employees can save money while still taking care of your team.
Let’s look at what’s working for other North Carolina businesses.
Why Businesses Are Looking for Alternatives to Small Group Insurance Plans for Employees
Group health insurance used to be straightforward. You picked a plan, split the cost with employees, and coverage took care of everyone. But those days have ended. Premiums rise faster than most North Carolina businesses can handle.
Today’s small group plans come with additional challenges. Insurance companies require minimum participation rates—often at least 50% of eligible employees must enroll.
If you have a diverse workforce with varying needs, meeting these requirements becomes tough. Young employees might skip coverage because they can’t afford it, which then threatens your ability to offer the plan at all.
The healthcare world has changed, and new solutions have emerged. These options give you more control over costs while helping employees get the coverage they need. Best of all, many are easier to manage than traditional group plans.
Individual Marketplace Plans: A Practical Solution
More businesses are helping employees buy their own insurance through the marketplace. This approach makes sense for several reasons.
#1: Tax Credits Help Your Employees Save
Many workers qualify for tax credits that lower their monthly insurance costs. Income and family size determine these credits.
Often, employees pay less for individual coverage than they would for group insurance. North Carolina has multiple insurance companies on the marketplace, which keeps prices competitive.
#2: Each Person Gets the Right Coverage
With group plans, everyone gets the same thing, whether it fits or not. Individual plans let each employee choose what works for them.
Someone young and healthy might pick basic coverage. A parent with kids might want better benefits. Everyone wins when they can choose.
#3: Less Paperwork for You
Managing group insurance takes time and effort. Individual plans remove that burden. No more renewals to negotiate. No more forms to track. No more calculating who owes what.
You point employees in the right direction, and they take it from there.
Health Reimbursement Arrangements: Help Without the Hassle
Want to chip in for healthcare costs without buying group insurance? Health Reimbursement Arrangements (HRAs) let you do exactly that.
#1: Individual Coverage HRA (ICHRA)
With an ICHRA, you give employees money to buy their own health insurance. You decide how much to contribute. You can even give different amounts to different groups of workers.
Your costs stay predictable, and employees get help paying for coverage.
#2: Small Employer HRA (QSEHRA)
If you have fewer than 50 employees, a QSEHRA keeps things simple. You can reimburse workers for health insurance and medical expenses up to certain limits.
It’s a tax-friendly way to help without dealing with group plan headaches.
Direct Primary Care: Something New That Works
Here’s an option many businesses haven’t considered. Combine a high-deductible health plan with a direct primary care membership.
Direct primary care doctors charge a flat monthly fee. Employees get unlimited visits, same-day appointments, and longer consultations with their doctor.
Add a high-deductible plan for major medical issues, and you have solid coverage at a fair price.
This setup gives employees easy access to everyday care while protecting them from big medical bills.
Making the Switch Work
Moving away from group insurance takes planning. Here’s how to do it right.
#1: Help Your Employees Understand
Most people have only had employer-provided insurance. They need guidance to shop for their own coverage. Share resources and connect them with insurance agents who can explain options.
These professionals usually help for free since insurance companies pay them.
Consider hosting information sessions before making the switch. Bring in experts to explain how the marketplace works, what tax credits mean, and how to compare plans.
Give employees written materials they can review at home. The more they understand, the more confident they’ll feel about the change.
#2: Time It Right
Health insurance has specific enrollment periods. Plan your switch to match these windows. Open enrollment runs from November to mid-January.
Missing these dates could leave employees without coverage.
Special enrollment periods happen when employees experience qualifying life events—marriage, divorce, having a baby, or losing other coverage.
Keep track of these situations so you can help employees get coverage when they need it.
#3: Stay Supportive
Even though you’re not providing insurance directly, your team still needs help. Answer questions when you can. Keep a list of resources handy.
Show employees you still care about their well-being.
Some companies designate “benefits ambassadors”—employees who’ve successfully navigated the individual market and can share their experience with coworkers.
This peer support often proves more valuable than formal training.
What This Means for North Carolina Businesses
Choosing alternatives to group insurance doesn’t mean you care less about employees. It means you’re finding smarter ways to help. You can support your team’s health needs while keeping your business financially healthy.
Individual plans, HRAs, and new care models give you flexibility that group plans don’t offer. Pick the approach that fits your company’s size, budget, and culture.
Many North Carolina businesses worry about recruiting and retention without traditional benefits.
But employees increasingly value flexibility and choice over one-size-fits-all solutions. When you help them find affordable individual coverage or contribute through an HRA, you demonstrate innovation and care.
Some companies even find that offering benefits dollars instead of a set plan helps them attract younger workers who appreciate the freedom to choose.
The financial predictability alone makes these alternatives worth considering.
Group insurance renewals bring uncertainty every year—will rates jump 10%? 20%? More? With HRAs, you set your contribution and stick to it. Your budget stays stable while employees still get help with healthcare costs.
The North Carolina insurance market offers more choices than ever before. Use them to build a benefits strategy that actually works.
Ready to Explore Your Options?
Want to learn more about alternatives to group insurance?
The right guidance makes all the difference.
Contact us or give us a call at 919-285-4732 to schedule your consultation!
We’ll review your current situation and show you all the options available. Our help is free, and we’ll find the solution that fits your business best.