While owners of businesses with fewer than 50 full-time employees are not required to offer workers health insurance coverage, many do. For some, it is an employee benefit-oriented decision while others want to take advantage of tax breaks and other financial perks.
Regardless of the reasons, the challenge for these small business owners often lies in creating a flexible, customized health insurance plan.
When it comes to health insurance plans, one size does not fit all
For a few small businesses, a health insurance plan suitable for adults ages 18 to 25 may be all that is needed. However, a typical small business with more than 10 or 15 employees, for example, will likely have a range of ages and health needs among its workers.
Or, as a single article put itAnd
Small businesses must offer competitive employee benefits packages to not only attract and retain top talent but also to enhance company culture and increase productivity. However, with five generations in the workplace, the best benefits for each employee can vary widely.”
The article goes on to note that offering a flexible benefits package is the best way to ensure employees receive the benefits that are most important to them.
For those new to the health insurance plan world, the term “flexible benefit” can be ambiguous.
Simply put, flexible benefit plans provide a range 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 bespoke benefits packages for employees 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 popular flexible benefit plans that employers can offer is known as a cafeteria plan. Usually, this type of plan consists of several benefits to cover eligible expenses, as long as they meet the criteria set by the IRS in Section 125.
The IRS defines a cafeteria plan as,
“[A] A separate written plan maintained by the employer for employees that meets the specific requirements and regulations of Section 125 of the Internal Revenue Code. It offers participants an opportunity to receive certain benefits on a pre-tax basis.”
So-called “simple cafeteria plans” are especially beneficial to small business owners since they generally provide employers with 100 or fewer employees a safe haven from the non-discrimination requirements of a particular plan in exchange for contributing benefits to each eligible employee.
According to anyone HR resourcesThe most common benefits offered include:
- Group health insurance.
- 401(k) retirement plans.
- Health savings accounts.
- Flexible health spending arrangements.
- Flexible spending arrangements for dependent care.
- Group life insurance.
- Group dental insurance.
- Securing the group’s vision.
- Group disability insurance.
Employers should refer to IRS Publication 15-B For a full list of allowed benefits.
Great reasons for a flexible, customized health insurance plan
As every business owner knows, each of their employees is unique, which means their various benefits should reflect this, including their health insurance plan.
For example, an older employee with a large family who also has health issues is more likely to want different benefits than a younger employee who is healthy but also has a lot of student debt.
Flexible benefit plans allow employees to choose only the benefits that are right for them.
In addition, offering a flexible benefits plan eliminates the need for the employer to create a plan that is acceptable to everyone. Instead, by leaving choices to employees, business owners and managers can be more confident that workers are getting the best benefits to accommodate their individual health needs, budget, and personal and occupational satisfaction needs.
According to a recent survey, 65 percent Of the surveyed employees choose their own benefits.
Can an employer create a flexible benefit 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.
The list of quick steps includes:
- Determine your flexible benefit plan goals
- Budget analysis of your plan
- Understand your employees’ needs and preferences
- Design a benefits plan
- Select the recording option(s).
- Communicate your flexible benefits plan to your employees
- Evaluate the success of your benefit options and health coverage plan
While these steps are within the capabilities of most small business owners, they do require some time, effort, and resources to achieve a workable plan. The good news is that owners don’t have to go it alone.
A better approach – and one that will benefit everyone involved – is to partner with a trusted insurance professional who specializes in small group insurance. A company like JC Lewis Insurance services can offer the guidance, expertise, knowledge, and experience to avoid any number of advantages and pitfalls and help ensure that your plan is right for your company.
JC LEWIS can help you with your small group health insurance plan
At JC Lewis Insurance Services, we want to be your insurance partner, and we can help you create a high-quality, customized health insurance plan for your employees. JC Lewis Insurance Services offers plans only from leading health insurance companies that are 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 companies large and small, we are licensed and approved by every insurance company we represent.
When you’re looking to offer your employees a great benefits package – and one that includes great health insurance plans – you’re likely to have many questions and concerns.
This is great because we welcome your questions about health coverage insurance, and you can be confident that JC Lewis Insurance Services will help you find the right solution.