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As early as 2005, health insurance Utah realized that health care reform was needed, and began to generate sweeping changes within 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 in order to find what is most effective for his or her unique situation. Originally rolled out in January 2010 over a pilot program, January 2011 launched the first enrollment opportunity for many 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 within the Exchange using the broker or advisor they choose to assist these to navigate from the process and assist in educating their employees of these options. Enrollment is basically done over a web-based platform created for health care shopping and enrollment.

Can My Business Participate? To be an eligible small employer, you have to have between 2 to 50 eligible employees; at the very least 75% of these must reside in Utah; so you must fill out an internet application, including submission of eligible documents. Once an offer is established the group must have 75% participation of eligible employees. Once you have applied, you'll work directly with your broker or advisor to walk you through the process.

What about a Section 125 Plan? In order to participate in within 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 with the premiums being deducted completely pre-tax. The major benefit of a Section 125 Plan (also known like a cafeteria plan) is its tax-advantage status. They are deducted pre-tax, meaning that this employee's taxable income is reduced by the amount of the premium. As a result, the employee includes a lower taxable income, and to the reason lower FICA and Medicare taxes payable. The employer receives a benefit, too: the reduced employee taxable income means a lesser employer share of FICA and Medicare taxes, and will also mean lower FUTA assuring taxes.

What will be the Default Plan? The employer and advisor must pick a default health plan for his employees, and enroll them in the default plan, unless:

The employee chooses their particular plan option online with a different plan through the Exchange. The employee waives coverage and can prove medical health insurance coverage elsewhere. The employee specifically declines coverage within the individual health insurance in Utah benefit plan. Also, the employer might not give you a major medical health benefit plan that just isn't part of the defined contribution arrangements available inside the Utah Health Exchange. The Utah Health Exchange includes a great deal of moving parts and is also most certainly not the proper fit for all employers. As of March 7th, less than 10% with the employers opting for the Exchange were offering benefits to the first time. Insurance and also the regulation surrounding these offerings can certainly be a daunting task; make sure you might have a great advisor to hold your hand from the process. Also make sure you've a Section 125 Premium Only Plan that's flexible and supplies automated compliance.