Employee Benefits
- I want to provide my employees with an employee benefits package. How do I begin?
- How would working with a benefits broker be advantageous to me?
- Are there any special requirements and guidelines that I need to meet to obtain benefits for my employees and their families?
- Am I required to pay the full cost for my employees and their families for the benefits I offer?
- Do I have to offer the full array of benefits or can I pick and choose what I want to offer to my employees?
- What’s a copay? What’s a Deductible? What’s Coinsurance? What’s the Out-of-Pocket Maximum?
- What is a PPO and how does it affect my healthcare choices?
- What is an HSA Plan?
- What is an FSA Plan?
- What do I do if I have employees that work in multiple states?
I want to provide my employees with an employee benefits package. How do I begin?
We can help your company create an employee benefits package that both meets their needs and is affordable. Employee benefits typically include medical, prescription drug coverage, dental and often, a life insurance benefit. There are many other benefits to choose from as well such as vision, short term and long term disability, long term care insurance and much more. Some companies will also offer some form of retirement investment program as well as a flexible spending account.
As an employer who wishes to offer health insurance and other benefits to your employees and their dependents, you can choose to have a plan through an insurance carrier or if your group qualifies, a trust that partners with an insurance carrier. The underwriting techniques are different for both of these structures. Your benefits broker or agent can help you navigate through all the various choices that are available for your group size, budget and human resources philosophy.
How would working with a benefits broker be advantageous to me?
A benefits broker provides you with expert counsel, freeing you up to focus on building your business. We act as your partner in the process of choosing and setting up your benefits package. We listen to your goals and design programs that help you achieve them. Think of your benefits broker as an extension of your own team and someone who can represent you in the market place.
Yes. There are many State and Federal requirements that need to be met to implement a successful and compliant benefits package.
To obtain a group insurance policy for your company you must employ at least 2 employees. These employees must receive a W-2 and meet the eligibility requirements that you as a company determine as well as the requirements from the carrier you choose to work with. An employee who is defined as a contractor or 1099 employee is not eligible to participate in your benefits package. As the employer, you may require your employees to work more than 20 hours a week before offering benefits and you may implement a probationary period before offering benefits. Most insurance carriers also require a minimum of 20 hours per week to qualify for benefits. Developing the right-sized and uniquely suited benefits for your team takes care, thoughtfulness and a little time. We bring all three to the task.
Am I required to pay the full cost for my employees and their families for the benefits I offer?
No. As an employer you are not obligated to pay the full premiums for your employees and their dependents. Most carriers do require that you contribute at least 75% towards your employee’s cost but you may elect to fund any portion (including none) of the benefits extending to dependents.
It is up to you to decide which benefits you wish to offer to your employees. To be competitive, most industries offer a medical and prescription drug plan. You may want to also offer additional benefits, such as dental, vision, life and AD&D (Accidental Death & Dismemberment), disability, and supplemental insurance. Your insurance specialist can talk with you about each benefit and help you determine the mix that optimizes for your goals. For some smaller groups, not all benefits are available.
What’s a copay? What’s a Deductible? What’s Coinsurance? What’s the Out-of-Pocket Maximum?
Here’s a brief definition of each for you and if you have further questions, your benefits broker is sure to help.
- • Copay — is the upfront amount due at the time a service is provided for you. Typical copays for office visits range from $20 to $35. There are typically also prescription copays.
- • Deductible — the upfront expense that each employee and each family member on the plan will have to pay before the insurance carrier starts paying its portion on the plan. Most plans have an individual (employee) deductible and a family deductible. An example would be $500 deductible for employee and $1,500 for the entire family. Most plans do allow for some benefits that are not subject to the deductible, such as office visits and preventive care.
- • Coinsurance — is the percentage of covered medical services costs you and the insurance carrier share. For example, if your plan sets the coinsurance percentage at 80% the insurance carrier will pay 80% of the covered medical bills. You will pay the remaining 20%.
- • Out-of-Pocket or Coinsurance Maximum — if coinsurance obligations are part of benefit plans, then out-of-pocket expenses can add up fast. So where does it end? Enter Out-of-Pocket or Coinsurance Maximums. The “Maximum”, say $2,000, represents the most an employee will be asked to pay out-of-pocket as “coinsurance” in any one benefit year. After that point, the insurance company will cover 100% of all contractual coverages for the remaining part of the coverage year. Copays for office visits and prescription drug coverage will continue to be charged to you even after this maximum has been met.
What is a PPO and how does it affect my healthcare choices?
A PPO is a Preferred Provider Organization. A PPO is a network of healthcare providers (physicians and hospitals) that have been credentialed and approved by an insurance company to provide services to their members. There are often two levels of providers in a PPO — In-Network (or often referred to as Preferred Providers) and Out-of-Network (often referred to as Participating). When you see an In-Network provider your services are paid at the higher level. When you visit an Out-of- Network provider, the plan reimburses a lower amount. To make sure the insurance you want is the insurance you buy, we can help you review these sorts of details.
An HSA (Health Savings Account) Plan is an arrangement where both the employer and the employee (if they choose to) contribute funds to an account whose funds can only be used for paying eligible health care expenses. The HSA is paired with a High Deductible Health Plan (HDHP) with $1,500 deductible or higher annually. It’s important to note that almost all the benefits (including prescription drugs) don’t kick in until after the deductible has been met. These plans have tax consequences for both businesses and employees, so we suggest involving your accounting/tax experts in seeing if HSAs are right for you. One of the services we offer as your broker is to help explain HSA plans to your employees.
An FSA (Flexible Spending Account) plan, dictated by Section 125 of the Internal Revenue Code, allows an employer to offer pre-tax benefits to their employees for their premium deductions from payroll, as well as other health expense costs and dependent care costs. The health expense portion and day care portion are voluntary for an employer to offer. If you take this money out of your employees’ paychecks on a pre-tax basis, the IRS requires you have a Premium Only Portion (also known as a POP) plan set up. We are happy to help you with this process.
What do I do if I have employees that work in multiple states?
Many insurance companies offer coverage on a national basis through their own networks. If an insurance company does not have a provider network in a particular state, they often have the ability to lease a network for you, or you can set up a separate plan in the state that needs coverage. If this applies to your company, we can help you select the right insurance provider for all your employees.