Employee Benefit Plans
Health Benefit Plans
The simple truth is, cash is not enough to recruit and retain top employees to your organization. A benefits and perks package is an overwhelming part of the entire recruiting and retention process.
On the very top of the list of benefits are, health insurance, retirement, disability and dental. There are a myriad of different plans and policies. Navigating the path to find the plan best suited to your specific need takes a lot of knowledge, time, and patience. Our benefits experts are skilled at creating tiered plans, with various deductible limits to allow participants to adapt as their needs change.
Containing health care costs, and increased out of pocket medical expenses is a key issue facing both employers and employees. Premiums for Health Insurance in 2016 are expected to edge beyond $16,800 for an average family, according to a recent study by the National Conference of State Legislatures. Insurance companies around the nation are seeking rate increases of 20 percent to 35 percent, arguing that new customers under the Affordable Care Act are sicker than studies initially predicted. This directly impacts small businesses and employees, as they obtain insurance in the private market.
However, PEOs are typically shielded from high rate increases due to their aggressive cost containment strategies, and purchasing power. PEOs, due to their large employment pool, do not have to secure coverage through the market pool. Rather, they have the ability to write their own insurance on more favorable terms. Most PEO clients see a rate increase of 3 percent to 7 percent per year in their health insurance premiums.
PEOs, due to their sheer size, can design their own master health plan and aggregate thousands of employees, and offer broad range of Health Care Coverage for employees. This makes it possible for companies to offer rich benefit plans and attract and retain talent crucial to the growth of their company. Additionally, PEOs can provide assistance in claims management, acting on behalf of employees to resolve and mediate benefit disputes.
Typical health insurance plans include the following. Actual plans may differ based on product offerings available at time of binding.
|Medical Plans||Dental Plans|
|Open Access HMO||PPO Indemnity|
|PPO / Indemnity|
|Qualified High Deductible Health
|Limited Health & Accident Plans||Group Life Insurance|
|Hospital Indemnity Insurance (GAP)||Employer Paid Life Insurance|
|Supplemental Term Life Insurance|
|Group Disability Products||Spouse & Dependent Life Insurance|
|Employer / Employee paid STD|
|Employer / Employee paid LTD||Group Supplemental|
|Cancer & Disease Insurance|
|Individual Supplemental Insurance Products||Critical Illness Insurance|
|Short term Disability Insurance||Accident Plan Insurance|
|Long Term Care Insurance|
|Permanent Disability Insurance||Tax Advantaged Accounts|
|Section 125 Premium Only Plan|
|401K Retirement Plan||Flexible Spending Accounts|
|Safe Harbor Options||Dependent Flexible Spending Accounts|
|Discretionary Options||Health Savings Accounts|
Clients can choose a combination of benefits to meet the needs of their employees. These cost saving plans allow small businesses and owners the ability to participate in quality, affordable, health plans.
With the recently enacted Health Care Reform Act, all individuals who are not covered by an employer health plan, or other government and public insurance, are required to have an approved insurance policy, or pay a penalty. Employers with 50 or more full time or full time equivalent employees are required to offer their employees affordable health care benefits.
PEOs can offer plans known as Minimum Essential Coverage (MEC) and Minimum Value Plans (MVP) to their employees. These plans are scaled down health plans, which offer at least 60% actuarial benefits, meaning it pays at least 60% of claims submitted by policyholders. These bronze plans satisfy the ACA criteria and the employer will not be subject to the $3,000 penalty if the employee rejects the coverage and enrolls in the Health Exchange Marketplace or Medicare / Medicaid. These plans are usually offered at a lower premium than plans in the Health Exchange Marketplace.
In addition to the above, PEOs also offer full scaled plans for clients who are accustomed to richer benefit plans.
401K Retirement Plans
Offering employees a 401K Retirement Plan is imperative to attracting and retaining key employees. However, the costs and paperwork associated with managing a 401K plan is prohibitive and cumbersome.
Owners and Highly Compensated Employees (HCE) see little benefit with 401K plans, as plans frequently fail compliance tests.
If the plan routinely fails the compliance tests due to either employee participation or being Top Heavy, it may be advantageous to consider a 401K Safe Harbor plan.
A Safe Harbor plan allows plans to pass the compliance tests by requiring the plan sponsor to make employer contributions to the plan. The contributions could be a matching contributions or a non-elective contributions. The matching contribution uses the formula of a 100% match of the first 3% plus 50% match of the next 2% of employee compensation deferred. The non-elective contribution is 3% of compensation to all eligible employees, regardless of whether they make 401(k) contributions themselves. Both contributions are 100% vested immediately.
A 401K Safe Harbor plan defers compliance tests and allows owners and other HCE to maximize contributions to the plan.