While owners of businesses that have fewer than 50 full-time employees are not required to offer their workers health insurance coverage, many do nonetheless. For some it is more of an employee benefit-oriented decision while others want to take advantage of tax breaks and other fiscal perks.
Regardless of the reasons, the challenge for these small business owners often lies in creating a flexible and customized health insurance plan offering.
WHEN IT COMES TO HEALTH INSURANCE PLANS ONE SIZE DOES NOT FIT ALL
For a few small businesses, a health insurance plan that is right for mostly single adults between the ages of 18 and 25 may be all that is needed. However, the typical small business with more than, say, 10 or 15 employees is likely to have a range of ages and health needs among their workers.
Or, as one article put it,
“Small businesses should offer competitive employee benefits packages not only to attract and retain top talent but also to enhance company culture and boost productivity. However, with five generations in the workplace, the best benefits for each employee can vary greatly.”
The article goes on to note that offering a flexible benefits package is the best way to ensure that employees are receiving the benefits that are the most important to them.
For those new to the health insurance plan world, the term “flexible benefits” can be vague.
Simply put, flexible benefit plans provide a set of benefits that each employee can choose from such as health insurance plans, reimbursement accounts, and highly rated retirement plans. The idea is to create custom employee benefits packages that fit their lifestyles and preferences.
In recent years, flexible benefits have become extremely popular with both employers and employees
TYPES OF FLEXIBLE PLAN BENEFITS
One of the most common flexible benefits plans employers can offer is known as a cafeteria plan. Typically, this type of plan is comprised of several benefits to cover eligible expenses, as long as they meet the criteria outlined by the IRS in Section 125.
The IRS defines a cafeteria plan as,
“[A] separate written plan maintained by an employer for employees that meets the specific requirements of and regulations of section 125 of the Internal Revenue Code. It provides participants an opportunity to receive certain benefits on a pretax basis.”
What are known as “simple cafeteria plans” are especially beneficial for small business owners as they generally provide employers with 100 or fewer employees a safe harbor from certain plan nondiscrimination requirements in exchange for contributing to each eligible employee’s benefits.
According to one HR resource, the most common benefits offered include:
- Group health insurance.
- 401(k) retirement plans.
- Health savings accounts.
- Health flexible spending arrangements.
- Dependent care flexible spending arrangements.
- Group term life insurance.
- Group dental insurance.
- Group vision insurance.
- Group disability insurance.
Employers should refer to IRS Publication 15-B for a full list of benefits allowed.
GREAT REASONS FOR A FLEXIBLE AND CUSTOMIZED HEALTH INSURANCE PLAN
As every employer knows, each of their employees is unique, which means that their various benefits should reflect that, including their health insurance plan
For example, an older employee with a large family who also has health issues will most likely want different benefits than those more in line for a younger, single employee that is healthy but also carrying a large amount of student debt.
Flexible benefits plans allow employees to choose only the benefits that are a good fit for them.
In addition, offering a flexible benefits plan eliminates the need for an employer to create a plan that is acceptable to everyone. Instead, by leaving the choices up to employees, business owners and managers can be much more confident that workers are getting the best benefits to accommodate their individual health, budget, and personal and professional satisfaction needs.
And, according to one recent survey, 65 percent of employees surveyed value choosing their own benefits.
CAN AN EMPLOYER CREATE A FLEXIBLE BENEFITS PLAN?
The short answer is, yes, you can. However, it can be challenging, and there are quite a few options and decisions to consider, as well as guidelines and requirements to follow.
A quick list of steps would include the following:
- Define the objectives of your flexible benefits plan
- Analyze the budget for your plan
- Understand your employees’ needs and preferences
- Design the benefits plan
- Decide the enrollment option(s)
- Communicate your flexible benefits plan to your employees
- Evaluate the success of your benefits options and health coverage plan
While these steps are within the capabilities of most every small business owner, they do require some time, effort, and resources to achieve a viable plan. The good news is that owners don’t have to go it alone.
A far better approach – and one that will benefit everyone involved – is to partner with a trusted insurance professional that specializes in small-group insurance. A firm like J.C. Lewis Insurance services can provide the guidance, expertise, knowledge, and experience to avoid any number of benefits and pitfalls and help to ensure your plan is right for your company.
JC LEWIS CAN HELP YOU WITH YOUR SMALL GROUP HEALTH INSURANCE PLAN
At J.C. Lewis Insurance Services, we want to be your insurance partner, and we can help you create a quality, customized health insurance plan for your employees. J.C. Lewis Insurance Services offers plans only from the leading health insurance carriers licensed to do business in the states in which we operate.
We are a family-owned and operated health insurance agency located in Sonoma County, California. As specialists in finding and managing medical insurance plans for large and small businesses, we are licensed and certified by each insurance carrier we represent.
When you’re looking to offer a great benefits package for your employees – and one that includes great health insurance plans – you are likely to have several questions and concerns.
That’s great because we welcome your questions about health coverage insurance, and you can be confident that J.C. Lewis Insurance Services will help you find the right solution.