The Truth About Benefits Plans and Your Business!

What is it, and How Does it Work?

 

Group Benefit Plans are a tax-effective way to compensate employees.  There are 3 common ways to set up a Benefits Plan.

  1. Traditional Group Insurance (TGI) – Carrier takes on 100% of risk.
  2. Health Care Spending Accounts (HCSA) – You decided how much risk you take on.
  3. Administrative Services Only (ASO) – You are on the risk.
  4. Flex Benefits (FB) – Carrier takes on 100% of risk.

What Does It Cover?

 

Benefit Plans are typically set up to reimburse the Health & Dental expenses of employees.

In some cases, there is also the option to include “Peace of Mind” coverage such as Life, disability, Critical Illness, and Employee Assistance Programs.

How Much Does It Cost?

 

A Benefits Plan can cost as little as $51 per month per employee for an HCSA… or as much as you want to spend.

Typical TGI and FB plans are going to cost anywhere from around (need to complete sentence ….)

Will the Cost Ever Increase?

 

If you go the HCSA route, then you decide if you want to increase the contributions.

If you go with a TGI plan, then your Carrier will typically want to discuss your rates at the end of each year.. really depends on how much you and your employees claim vs. how much you paid in premium.

If you choose ASO, then your contributions will (unfinished sentence?)

Do I Have to Fill Out a Medical Questionnaire?

 

Typically, you do not have to complete a Medical Questionnaire but there could be pre-existing conditions clases.

Can I add Optional Coverage?

 

With HCSA, you can add Travel and/or Catastrophic coverage.  Usually with TGI you can have Optional Life and Optional AD&D coverage. The FB inherently has options built …rest of sentence?

Pay Increase or have a Benefits Plan?

 

Let’s take a look at giving someone making $50,000 a year vs. implementing a Benefits Plan:  (rest of sentence?)

What’s Involved?

 

You need to complete the Application, which is your enrollment form.  YOu are the only one on the plan, so if your status changes (married, add child, divorced, etc…) you inform the Carrier.

What’s the Downside?

 

If the is a downside to the ASO, then it is the fact that you are on the hook for medical claims up to $5,000 per person (you and, if applicable, each of your dependents).