One Health Plan or Two? Build an Employer Contribution Strategy Before Renewal

Give the second plan a clear job

A base option might prioritize a manageable payroll deduction, while a buy-up option offers a different deductible, network or cost-sharing pattern. Define the difference plainly. Two nearly identical plans can complicate enrollment without solving a meaningful problem.

Ask the carrier which combinations are available, what participation requirements apply and how the employer contribution must be structured. Do not assume any two products can be combined. Use the same census and effective date for all proposals, then compare the benefits as well as the premium.

The federal SBC is designed to make coverage features easier to compare. Use the SBCs for both proposed options alongside the actual employee rates. Source: HealthCare.gov.

Decide how the employer dollar follows the employee

Two common approaches deserve a calculation: a defined dollar contribution toward an eligible coverage tier, or a percentage of the selected plan's premium. Carrier requirements and applicable benefit rules can limit the design, so confirm the proposed method before communicating it.

A fixed dollar amount can make employer spending easier to project for a stable enrollment count. A percentage generally changes employer spending when the selected premium changes. Neither method guarantees fairness across wages, family sizes or coverage needs.

Write the contribution by coverage tier. State whether the employer supports dependents and whether an employee who declines coverage receives anything. Confirm eligibility, payroll and tax treatment instead of assuming a waiver payment or cash option can be added informally.

See how the same plans produce different budgets

Illustration only: The base plan costs $650 monthly for employee-only coverage and the buy-up costs $800. A $500 employer contribution leaves the employee paying $150 for the base or $300 for the buy-up. The employer pays $500 either way, subject to the assumptions and approved contribution design.

With a 75% contribution to the selected premium, the employer instead pays $487.50 for the base or $600 for the buy-up. Employee deductions become $162.50 and $200.

For 20 enrolled employees, the percentage approach costs the business $9,750 monthly if everyone chooses the base and $12,000 if everyone chooses the buy-up. A half-and-half election costs $10,875. The fixed $500 example costs $10,000 at each mix. These are sample premiums, not Washington quotes, and exclude dependents, fees and enrollment changes.

Check affordability and the cost of using the plan

Calculate each employee deduction per paycheck, not just per month. Compare annual premiums plus realistic care scenarios. A plan that saves $50 monthly in payroll deductions can still cost an employee more if regular prescriptions or visits become substantially more expensive.

For applicable large employers, the ACA analysis generally focuses on the lowest-cost self-only offer providing minimum value, using the applicable rules and any permitted safe harbor. The IRS set the indexed affordability percentage at 10.22% for plan years beginning in 2027. That percentage alone does not determine a contribution schedule or resolve a particular employee's Marketplace eligibility. Source: IRS Revenue Procedure 2026-26.

Do not assume the employee-only result answers whether family coverage is affordable. Household tax-credit eligibility and employer shared-responsibility compliance require their own analysis.

Make risk shifting visible

A lower employer bill may come from a lower underlying premium, a reduced employer contribution or employees accepting more cost sharing. Show these separately. Calling all three savings hides the reason employees experience the change.

If the base plan has a high deductible, ask what resources employees have before the plan pays for deductible-subject care. If an HSA contribution is part of the solution, confirm the plan and employee eligibility and include the employer deposit in the budget. A lower premium is only one line of the decision.

Check access under both options. A second plan is less useful if employees assume it includes a specialist or hospital that the actual network excludes. Give employees a private way to check coverage questions.

Stress-test the menu before you offer it

Build low, middle and high employer-spending scenarios using different elections, dependent tiers and plausible enrollment changes. Ask whether the business can support the expensive case throughout the year. Record the assumptions instead of relying on last year's mix without review.

For Washington employers buying small-group coverage, the OIC lists available insurers and service counties. Availability can differ across the workforce, so confirm where the proposed options operate before designing the menu around them. Source: Washington OIC.

After the decision, verify payroll setup, employee elections and carrier records. Show the employer contribution in enrollment materials so employees can see how each deduction was calculated.

Offer a choice you can support

One well-chosen plan can be appropriate when simplicity and consistent coverage matter most. Two options can work when employees value the differences and the employer can fund the resulting elections. Add a plan because it solves a documented need.

Ask Benefit Experts for a contribution and plan-menu comparison. Bring your current contribution schedule, census and renewal. Compare the employer budget, employee costs and coverage differences before settling on the menu.

Common employer benefits questions