Understanding New Insurance Options

Employee Benefits Options

Health insurance products have been the same since… well since forever. Small companies purchased group health insurance plans. Deep-pocket Corporations self-insured employee health care risks. These self-funded companies avoided insurance premiums and didn’t pay until an employee submitted a claim.

The Affordable Care Act inspired a change in this traditional health insurance dynamic. As employers sought less expensive insurance plans, insurance companies and HR service companies responded with new employee benefits options.

Level Funding Health Insurance Plans

A Level Funded plan is an insurance/self-funded hybrid. It allows your business to be self-insured, but only up to a point. As an “insured,” you pay a set monthly amount into a fund. A Third Party Administrator manages your fund, paying claims as received.

Individual and aggregate stop-loss features make Level Funding plans different from traditional self-insurance. When claims exceed a predesignated amount, the plan reverts to a standard insurance model and the insurance company pays your claims. A number of features make level funding one of the popular new employee benefits options.

• Cost predictability with consistent monthly premiums
• ACA Health Insurance Tax (HIT) exemption
• Exclu from ACA benefit and community rating requirements
• Savings on renewal when prior year losses are low

High Deductible Health Plan

When a health care plan has a deductible of at least $1,350 per person and $2,700 per family, it meets the IRS definition of an HDHP. The health carrier doesn’t pay your employee’s claim unless it exceeds the deductible. This higher claim threshold lowers your premiums and increases your employee’s claim contribution.

IRS guidelines limit out of pocket expenses to $6,500 per individual and $13,300 per family. Employees may set up Health Savings Plans to pay medical costs with pre-tax dollars.

Professional Employer Organizations

A PEO is a contractual relationship that gives a service company employer status over your employees and other company’s employees. The PEO charges a fee to manage payroll, compliance, tax deposits, and other employee benefits options.

Your business pays a lower health care premium because you shift your employees into a larger pool of “employees.” The large numbers give you a rating advantage when the PEO procures health insurance and other services.

New Employee Benefits Options

Our insurance company and vendor partners have their own versions of these and other employee benefits options. Contact us and we’ll tailor a plan that’s right for your company.