Making the Most of Healthcare Coverage: Group Benefits vs. Healthcare Spending Accounts
As a business owner, you’re likely already aware that offering health benefits to your team is a great way to improve job satisfaction, employee retention as well as attracting new top talent when hiring. After all, a happy, healthy employee means less time off work and higher productivity – what employer doesn’t love that? These days, offering benefits is easier than ever. With two great options: Group benefits or health spending accounts, you can offer a flexible plan based on your budget and company size.
Traditionally, group benefits were the “go-to” choice for health coverage. This type of plan varies based on what you wish to include and can be as simple as basic health coverage to more inclusive options such as extended health care or life insurance. A group benefits plan is sponsored by you, the employer, and allocates coverage amounts for services up to a limit for your employees. These coverage limits are often in the form of a percentage of the fees covered or reimbursed, up to a total spending limit for that service. For example, your plan may cover 80% of routine dental fees for the plan member, up to a total spend of $1,000 a year. In order to participate in the group plan, your employees may pay a portion of the costs by covering the other 20% (known as a co-pay), there may also be a deductible to help manage the overall costs of a traditional health benefits program.
If your plan offers a long-term disability benefit, you may want to deduct the costs of this coverage off employee’s payroll. Doing so will ensure any benefits claimed will not be taxed. Should an employee submit a claim on employer-paid disability benefits, that claim would be taxable and the injured employee may have a more difficult time paying their bills during their recovery period.
If you’re considering offering job perks, such as benefits, then group benefits are an easy way to help make healthcare more accessible and affordable for your team, especially in areas where government plans fall short.
Healthcare spending accounts
Healthcare spending accounts are becoming increasingly more popular as a health coverage option for many employers. These plans are unique in that they can be used as a “stand-alone” plan or in addition to an existing group benefits plan to create more flexibility. Much like traditional coverage, the plan is sponsored by the employer and allocates fixed coverage amounts for the account, which are renewed at the end of the benefit year. However, the biggest difference is in the flexibility of the account. Unlike traditional benefits plans, the plan member is not limited to what services they can use the benefits towards. Instead, they are entitled to use any amount of their coverage toward a wide variety of approved healthcare services as they see fit, up to the fixed plan limit. For example, rather than being limited to, say, 60% of their dental services covered, the plan member could cover 100% of those costs at their discretion. Plan limits are very flexible, so this is a great option if you’d like to offer benefits to your staff on a budget and can be especially helpful for a small employer as they would not be subject to annual increases as with traditional benefit programs. Plans are also available for self-employed individuals, too.
Before offering health coverage for your employees, it’s important to know exactly what packages are available to you. Make the most of your options by speaking with Darryl Smith first at (705)-424-0562. He will review your needs, talk budgets, and help you choose coverage that best suits your business. Build a healthier, more productive workforce today, and watch your business grow tomorrow!