Proposed federal and state legislation could significantly impact how small businesses, such as collision repair shops, offer health insurance to their employees. The ‘One Big Beautiful Bill Act’ (H.R. 1) aims to provide more affordable and flexible health insurance options for employers with 50 or fewer employees, according to Kevin Dunn, CEO of Decisely.
The bill proposes allowing employers to offer tax-deductible contributions, such as $50 or more per month, that employees can use to purchase their own health plans. “The ‘Big Beautiful Bill’ includes favorable language that expands employer incentives and empowers employees with choice when it comes to their health insurance,” Dunn explained. This approach works similarly to group insurance products but with less risk and lower costs for both businesses and employees.
Key Provisions of the Legislation
- Employers can offer tax-deductible contributions for employees to purchase health insurance
- Employees can choose from 10 to 100 plans, compared to the typical 3-5 plans offered by employers
- Creates a bipartisan initiative to strengthen the individual health insurance marketplace
The bill supports Individual Coverage Health Reimbursement Arrangements (ICHRAs), which provide employers with a flexible and budget-friendly way to offer health benefits. “ICHRAs give employers a new way to offer health benefits — one that’s flexible, budget-friendly, and portable for employees,” according to a Decisely blog post by Jess Southwell, the company’s senior vice president.
State-Level Initiatives
Ohio is considering a bill (HB133) that would provide an ICHRA tax credit of up to $400 per employee for businesses with 2-50 employees. The credit would be claimed against the taxpayer’s aggregated tax liability and would be added to the existing list of tax credits. The bill passed the House on June 4 and was referred to the Senate Ways and Means Committee on June 11.
Georgia is also considering a similar bill (HB341) that would offer an ICHRA tax credit for small employers with 10 or fewer employees who contribute at least $100 per month per employee. The credit would be available for up to five years with a declining credit amount:
- $600 per covered employee in the first three years
- $400 per covered employee in the fourth year
- $200 per covered employee in the fifth year
The bill was introduced in February and remains in the House.
Impact on Small Businesses
Dunn believes that this legislation can help small businesses with recruitment and retention by providing an additional $50 per employee per month towards health insurance. Decisely has launched a tailored ICHRA solution to support this shift, which Dunn describes as “a practical, cost-effective way to offer quality benefits.”
The proposed legislation has garnered bipartisan support, with Dunn noting that “it’s hard for them to disagree on helping small businesses in places like Ohio and Georgia, where there is a lot of small business.” By providing more flexible and affordable health insurance options, small businesses can better compete for talent and support their employees’ health needs.
