Group Health Benefits
56% of U.S. adults with employer-sponsored health benefits said that happiness with their health coverage is a key factor in deciding whether to stay at their current job. There are many types of group health benefits that you can provide to your employees. It is never too late to compare your group health options, as you can switch anytime during the year to save your organization money and enhance your coverage.
Most plans are ERISA (click HERE to find out more on the requirements) compliant to make sure you follow specific federal rules. Following, you will find different group health options and a brief explanation of what each type entails and their potential benefits. We will help you find the most fitting plan to meet your company’s needs.
Fully funded is the most traditional coverage option and what most people think of when they think of group health insurance. Large carriers offer fully-funded plans in which they take all the insurance policy risk. Your organization pays a monthly premium for the insurance company to manage claims and benefits for your employees.
Benefits of Fully Funded Plans:
1. Premium rates are fixed for the year. They only go up at the end of the contract period each year.
2. Insurance carriers take all the risk, no matter the amount of claims that year.
3. There are no administrative expenses dealing with claims and other plan costs.
For self funded plans, the employer assumes the financial risk of the health policy. By choosing this type of group health plan, your company pays an affordable, fixed fee to the carrier, plus employee medical claims as they come. This is a more ‘pay-as-you-go’ approach and can be less expensive if your employees' are relatively healthy, don’t use the plan as often and overall claims stay low.
Benefits of Self Funded Plans:
1. The healthier your employees are, the lower the plan costs will be.
2. More plan flexibility and customizations.
3. Can purchase stop loss coverage to help you know the cap limit on the annual cost for increased claims.
At its simplest, level-funding is simply self-funding done small.The employer makes a set payment each month to an insurer or third-party administrator which funds a reserve account for claims, administrative costs, and premiums for stop-loss coverage. If claims Page 6are lower than expected that year, surplus claims payments may be refunded at the end of the contract.
Benefits of Level Funded Plans:
1. Rates are fixed for premium, claims, and administration costs.
2. Can receive a refund at the end of the year depending on your employees' claims for that year.
3. Allows employers to ‘test out’ features of the self funded plans without taking all the risk.
ICHRA (Individual Coverage Health Reimbursement Arrangement)
ICHRA plans are an employer-funded, tax-free health benefit used to reimburse employees for individual health insurance premiums and qualified medical expenses. The employer sets a standard amount of funds that each employee is able to receive so costs arecontrolled. The employee then uses these funds to pay for premiums along with approved healthcare costs and services. These funds do not contribute to an employee's taxable income. This reimbursement model is sometimes referred to as the Defined Contribution approach.
Benefits of Level Funded Plans:
1. Greater cost control -employers can confidently set their health plan budget year after year, while providing employees coverage no matter what their needs.
2. Smarter Individual Choices-employees can shopthe open insurance market, compare and select what best suits their individual needs.
3. Easy Administration -leveraging an ICHRA specific technology solution can lift the administration burden by eliminating recurring tasks and simplifying the process of employee management.
4. All reimbursements are tax-free, including premiums.
Customizable and Individual Plans
These plans are ideal for organizations that have part time, seasonal, and hourly employees. They enable you to meet the unique needs of these employees and have a wide range of comprehensive or limited benefit plans available. Whether you are a company of one or a larger organization needing group health or an individual plan, we have options that enhance the benefits available that are suitable for your unique needs.