Group Medical Plans for Small Businesses: Traditional Coverage and ICHRA, Evaluated Side by Side
Some1 Family Office helps small business owners across Georgia choose between traditional group health insurance and ICHRA, an employer-funded alternative that converts group medical costs from a variable renewal problem into a fixed, defined contribution.
Two Paths to Employer-Sponsored Health Coverage — and a Decision That Deserves a Real Evaluation
Small business owners evaluating group medical insurance in Atlanta, GA typically face the same pressure year over year: a renewal increase they did not negotiate, a participation threshold they may not hit, and a carrier conversation that feels one-sided. Most have been presented with one option, accepted it, and absorbed the cost.
Based in Atlanta and advising businesses across Georgia, Some1 Family Office evaluates traditional employer-sponsored health insurance alongside ICHRA for every small business client before recommending either path. The recommendation follows the business — not the product that is easier to administer.
How Traditional Small Group Medical Plans Work
A traditional small group health plan is a single employer-sponsored policy offered to all eligible employees. The employer selects a carrier, negotiates a plan design, pays a defined share of the monthly premium, and enrolls the workforce during an open window. Employees contribute through payroll deduction. The carrier manages the network, the claims, and the annual renewal pricing.
For businesses where the workforce is concentrated, stable, and likely to participate, traditional group health plans deliver broad network access, a consistent plan structure, and a clear benefits proposition for recruiting and retention. The tradeoff is that the employer absorbs premium increases at each renewal with limited ability to push back, and the plan only moves forward if enough employees participate.
What small group medical plans in Georgia typically require:
- A minimum employer premium contribution, usually 50 percent or more of the employee-only monthly premium.
- A minimum employee participation rate, typically 70 percent of eligible employees after those with coverage elsewhere are excluded.
- A defined enrollment period and qualifying event structure governing mid-year changes.
An annual renewal accepted from or renegotiated with the carrier, often carrying a rate increase.
What Is ICHRA and How Does It Work for Atlanta Small Businesses?
ICHRA — Individual Coverage Health Reimbursement Arrangement — is an IRS-approved employer benefit established by federal regulation effective January 1, 2020. It allows a business to reimburse employees for the cost of individual health insurance premiums on a tax-free basis, instead of purchasing and managing a single group health plan for the whole workforce.
The employer sets a fixed monthly reimbursement allowance per employee. Employees shop for their own individual plan, select the coverage that fits their needs and network preferences, and submit their premium documentation. The employer reimburses up to the monthly cap. Reimbursements are tax-free to the employee and tax-deductible for the business. The employer does not manage the plan, negotiate with a carrier, or absorb a carrier's annual renewal increase.
For Atlanta business owners evaluating this path, Georgia Access — the state-based individual health insurance marketplace launched in 2023 — has expanded plan options and carrier participation for individual buyers across Georgia, which directly strengthens the ICHRA case. Employees choosing their own coverage through an ICHRA arrangement now have a more competitive individual marketplace to select from than existed when ICHRA was first introduced.
Step 1:
Set the Reimbursement Allowance
The employer determines a fixed monthly reimbursement amount per employee. Amounts can vary by employee class, such as full-time versus part-time or by age band, but must be applied consistently within each class.
Step 2:
Employees Choose Their Own Plan
Employees shop for individual health insurance through Georgia Access or directly with carriers and select a plan based on their own needs, network preferences, and premium budget.
Step 3:
Employees Submit Premium Documentation
After purchasing coverage, employees submit proof of their premium cost to the employer or a designated ICHRA administration platform.
Step 4:
Employer Reimburses Up to the Allowance
The employer reimburses the documented premium up to the monthly cap. The reimbursement is tax-free to the employee and deductible as a business expense.
The Participation Problem ICHRA Solves
The most common reason small group health plans stall or collapse at renewal is the participation requirement. Traditional small group carriers typically require that 70 percent of eligible employees enroll after accounting for those who have coverage through a spouse or another source. For a business with a mixed workforce of full-time staff, part-time workers, and employees who already carry individual coverage, hitting that threshold consistently is not always realistic.
ICHRA carries no minimum participation requirement. An employer can offer ICHRA to all eligible employees and reimburse only those who choose to use it. Employees with existing coverage elsewhere can decline. Employees who want coverage can opt in and select their own plan. The employer's monthly cost is determined by the reimbursement allowance and the number of employees who participate, not by whether enough of the workforce enrolled to satisfy a carrier threshold.
For small businesses in trades, independent medical practices, and professional service firms where workforce composition varies significantly from year to year, the absence of a participation floor is often what makes ICHRA the more workable structure.
ICHRA vs. Traditional Group Medical: How Some1 Evaluates Which Fits
Neither option is the right answer in every situation. Some1 evaluates both against the same set of questions for every small business client before recommending a direction:
- How many full-time eligible employees does the business carry, and what is the realistic participation rate?
- What is the current monthly per-employee budget for health coverage — and how much flexibility exists if the renewal increases?
- Does the workforce need a single shared network, or are employees distributed in ways that make individual plan choice more practical?
- Is there an existing group plan with a renewal approaching, and how does the current rate compare to a defined ICHRA allowance at the same monthly cost?
- Do employees want plan flexibility and the ability to choose their own carrier, or do they prefer a single employer-selected plan?
Traditional group plans tend to fit businesses where the workforce is stable, participation is consistent, and employees value a single employer-negotiated plan. ICHRA tends to fit businesses where participation is uncertain, renewal costs have outpaced the budget, or the employer wants to shift from a variable group expense to a defined monthly contribution they control.
For employees who want to understand what choosing their own individual health plan would look like under an ICHRA structure, the Individual Health Insurance page covers ACA marketplace options and how Georgia's coverage tiers work.
What Employers Ask About Group Medical Options in Georgia
What is ICHRA and how does it work for my Atlanta small business?
ICHRA is an IRS-approved employer benefit that allows you to reimburse employees for individual health insurance premiums on a tax-free basis instead of offering a single group plan. You set a fixed monthly reimbursement cap per employee, employees choose their own plan from the marketplace, and you reimburse their documented premium cost up to your cap. Your monthly cost is determined by the allowance you set, not by a carrier's annual renewal decision.
Should my small business offer ICHRA or traditional group health insurance?
It depends on your workforce composition, your participation rate, and how much cost predictability you need. Traditional group plans work best when the workforce is stable and participation is not a barrier. ICHRA tends to be the stronger fit when participation is uncertain, renewal costs are no longer sustainable, or you want to move from a variable group expense to a fixed monthly contribution. Some1 evaluates both against your specific situation before recommending either path.
What group medical plan options are available for businesses under 50 employees in Georgia?
Businesses under 50 full-time equivalent employees are not required under the ACA to offer group health insurance, but they can participate in the small group market through licensed Georgia carriers. Options include traditional small group health plans, ICHRA arrangements, or a layered strategy that combines a defined ICHRA contribution with non-medical group benefits. Some1 evaluates all available options against your employee count, budget, and workforce profile before making any recommendation.
What is the participation requirement for a small group health plan in Georgia?
Most small group carriers in Georgia require that at least 70 percent of eligible employees enroll after excluding those who have coverage elsewhere. For businesses with part-time staff, employees on spousal coverage, or a workforce that does not consistently enroll, reaching that threshold can be difficult. ICHRA has no participation requirement — employees can opt in or decline individually, and the employer reimburses only those who participate.
Is ICHRA a legitimate option — how long has it been available?
ICHRA was established by federal regulation effective January 1, 2020, and is fully IRS-approved. It satisfies the ACA employer mandate for applicable large employers and carries no minimum business size requirement. The governing regulations are published by the IRS and the Department of Health and Human Services. It is newer than traditional group insurance, but it is federally established, fully regulated, and actively used by small businesses across Georgia.
Some1 Family Office is an independent insurance agency and group benefits brokerage serving small businesses across the Atlanta metro area and throughout Georgia. For group medical planning that puts both options on the table and recommends what actually fits, the conversation starts here. Learn more about our advisory approach on our About page.
Set Your Own Terms for Group Medical Coverage
You should not be accepting a renewal you did not negotiate or running a plan that only works if enough employees decide to participate. Schedule a 24-minute consultation and find out whether your current structure still fits — and what a better option would cost.