Employers

If you are an employer, you know how important it is to keep a competitive employee benefits package. The only problem is, maintaining a rich benefits package is getting way too expensive... right?

Well not necessarily. We specialize in helping small businesses put together an attractive employee benefits package without breaking the bank.

The employee benefits market is changing, and it is changing fast. Change means opportunity.  We have the experience and knowledge to help you recognize and implement those opportunities.  You may think that you’ve explored all marketplace options when it comes to your employee benefits package….our bet is that you haven’t. 

We have been able to save companies thousands of dollars on their Health Insurance, Workers Compensation, Payroll Processing, 401k plans and a variety of other services.  Whether or not you end up doing business with us, give us a chance to show you what we can do for you, we promise you that you have nothing to lose and a LOT to gain.

Why Offer Employee Benefits?

 It is important to understand why benefits are so important to employers and employees. Without that knowledge many do not understand the importance of Employee Benefits.  Here are some of the reasons employers offer their employees benefits:

• To attract and retain capable people.
• To keep up with your competition.
• To foster good morale within your organization.
• To benefit from the Tax advantages.

Benefits are becoming a more important component of the total employee compensation package. This has become an increasingly important issue to employers, as benefits represent a significant portion of the overall compensation paid to employees. On average, employers spend between 20% to 33% of payroll on employee benefits.

For many employers, a benefit plan is an integral part of total compensation, because employers either pay the entire cost of a benefit plan or have employees contribute a small portion of premium costs for their coverage.

The full range of benefit programs is discussed in this section, including benefits that are required by law, such as Social Security and workers’ compensation, as well as voluntary benefits—time-off benefits, such as leaves of absence, vacation and holiday pay; retirement benefits; health and related insurance benefits, and a variety of other miscellaneous benefits commonly provided by employers, including tuition assistance plans, referral bonus plans, adoption assistance plans, and club memberships.

Common Types of Benefits Coverage

• Group Medical Insurance,
• Group Dental Insurance,
• Group Life Insurance,
• Disability Insurance,
• Defined Contribution or 401(k) Plans,
• Defined Benefit Pension Plans, and
• Cafeteria (or Flex) Plans.

These and other non-statutory (and fringe) benefits are outlined below and are discussed more fully in the section on voluntary benefits.

Medical and Dental Health Plans

A serious illness or injury can be devastating to an employee and his or her family. It can threaten their emotional and economic well-being. Thus, adequate health insurance is important to employees and is part of a solid group plan.

Group Health Plans

• Help attract and keep employees who can make your business a success.
• Relieve your employees of the anxiety of health care costs by providing the care they need before illness becomes disabling, thus helping you avoid costly employee sick days.
• Usually cost less than purchasing several individual policies with comparable coverage. Moreover, there are tax advantages to offering health care benefits: your contribution as an employer may be deductible and the insurance is not taxable income to your employees.

As an employer, you can choose either an insured (also known as an indemnity or fee-for-service plan) or a pre-paid plan (also known as a health maintenance organization).

Traditional Indemnity Plans An indemnity plan allows the employee to choose his or her own physician. The employee typically pays for the medical care and then files a claim form with the insurance company for reimbursement.

These plans use deductibles and coinsurance as well. A deductible is a fixed amount of medical expenses an employee pays before the insurance plan reimburses any more expenses. The deductible can range from $100 to $1,000 a year. Coinsurance is a percentage of medical expenses the employee pays, with the plan paying the remaining portion. A typical coinsurance amount is 20 percent, with the plan paying 80 percent of approved medical expenses.

Listed below are the most common types of insurance arrangements (indemnity plans) providing health care to groups of employees.

• A basic health insurance plan, covering hospitalization, surgery and physicians’ care in the hospital.
• A major medical insurance plan, usually supplementing a basic plan by reimbursing charges not paid by that plan.
• A comprehensive plan, covering both hospital and medical care with one common deductible and coinsurance feature.

Preferred Provider Organizations Preferred provider organizations (PPOs) fall between the conventional insurance and health maintenance organizations, and are offered by conventional insurance underwriters. A PPO is a network of physicians and/or hospitals that contracts with a health insurer or employer to provide health care to employees at predetermined discounted rates.

• They offer a broad choice of health care providers.
• Although there is no requirement for employees to use the PPO providers, there are strong financial reasons to do so.
• Because of the broader choice of providers, PPOs are more expensive than HMOs.
• PPOs may have less comprehensive benefits than HMOs, but the benefits usually can meet almost any need.
• PPO providers usually collect payments directly from insurers.

Health Maintenance Organizations Health maintenance organizations (HMOs) provide health care for their members through a network of hospitals and physicians. Comprehensive benefits typically include preventive care, such as physical examinations, well baby care and immunizations, and stop-smoking and weight control programs.

The main characteristics of HMOs are as follows.

• The choice of primary care providers is limited to one physician within a network; however, there is frequently a wide choice for the primary care physician.
• There is no coverage outside the HMO network of hospitals and physicians.
• Costs are lower, due to limited choice. Physicians are encouraged to keep patients healthy; accordingly, they often are paid on a per capita basis, regardless of how much care the patient needs.

The employer prepays HMO premiums on a fixed, per employee basis. Employees do not have to apply for reimbursement of charges, but they may have small copayments for medical services.

Dental Benefits Medical insurance frequently includes dental plans. Most plans cover all or portions of the cost for the following services:

• Cleaning, x rays and oral examinations.
• Fillings.
• Crowns and dentures.
• Root canals.
• Oral surgery.
• Orthodontia.

Disability Benefits A disability plan provides income replacement for the employee who cannot work due to illness or accident. These plans are either short term or long term and are distinct from workers’ compensation because they pay benefits for non-work-related illness or injury.

Short-Term Disability A short-term disability is usually defined as an employee’s inability to perform the duties of his or her normal occupation. Benefits may begin on the first or the eighth day of disability and are usually paid for a maximum of 26 weeks. The employee’s salary determines the benefit level, ranging from 60 to 80 percent of pay.

You, as an employer, may specify a number of days of sick leave paid at 100 percent of salary. The employee can use these before short-term disability begins.

Long-Term Disability Long-term disability (LTD) benefits usually begin after short-term benefits conclude. LTD benefits continue for the length of the disability or until normal retirement. Again, benefit levels are a percentage of the employee’s pay, usually between 60 and 80 percent. Social Security disability frequently offsets employer-provided LTD benefits. Thus, if an employee qualifies for Social Security disability benefits, these are deducted from benefits paid by the employer.

Life Insurance Traditionally, life insurance pays death benefits to beneficiaries of employees who die during their working years. There are two main types of life insurance:

• Survivor income plans, which make regular payments to survivors.
• Group life insurance plans, which normally make lump-sum payments to specified beneficiaries.

Protection provided by one-year, renewable, group term life insurance, with no cash surrenders value or paid-up insurance benefit, is very popular. Frequently, health insurance programs offer this coverage.

You should use the same principles for selecting a life insurance program as you do for selecting health insurance.