FAQ

Our Answers to Your Small Business Employee Benefit and Insurance Questions

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We know that small businesses and their employees have a lot of questions about employee benefits and insurance plans. Here are some of the most common questions we get from our clients, and our answers to them.

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What are employee benefits?

Employee benefits are any benefits provided to employees in addition to their base salaries and wages. A complete employee benefits package may include health insurance, life insurance, paid time off (PTO), profit sharing, retirement benefits, and more. Any non-wage benefit offered to an employee, either mandatory or voluntary, can be considered an employee benefit.

When should a small business think about adding benefits?

Benefits are an important way for companies of all sizes to attract and retain employees. While the Affordable Care Act (ACA) requires companies with more than 50 employees to offer certain benefits, companies of all sizes should consider the role benefit and insurance plans can play in making them attractive to job seekers.

What benefits are required by law?

Under the ACA, applicable large employers (ALEs)—companies with 50 or more full-time employees—must offer minimum essential coverage. This includes qualifying health plans like those that can be bought through the Health Insurance Marketplace, job-based options, Medicare Part A or Part C, coverage under a parent's plan and many other requirements. Employers that don't provide these benefits—and individuals who don’t choose an insurance plan—can be faced with monetary penalties.

What benefits do socially responsible employers offer their employees?

While only companies with more than 50 employees are legally required to offer benefits, companies of all sizes can benefit from being socially responsible and offering employees benefits that may include health insurance, short term disability, life insurance, dental insurance, vision insurance, and more.

What benefits are required by law?

Under the ACA, applicable large employers (ALEs)—companies with 50 or more full-time employees—must offer minimum essential coverage. This includes qualifying health plans like those that can be bought through the Health Insurance Marketplace, job-based options, Medicare Part A or Part C, coverage under a parent's plan and many other requirements. Employers that don't provide these benefits—and individuals who don’t choose an insurance plan—can be faced with monetary penalties.

What are some examples of employee benefits?

There are a wide range of benefits that companies may offer employees. Some examples of employee benefits include group health plans, dental insurance, vision insurance, short term disability, long term disability, life insurance, accident coverage, cancer care coverage, hospitalization coverage, ICHRA/QSEHRA, and more.

What are the most important employee benefits to offer?

The most important employee benefits to offer are those that will protect an employee if they are unable to work and cover the costs of healthcare services they may need. Making sure an employee has adequate healthcare coverage is most important. Secondly, a disability policy that offers financial protection in the event of an accident or health concern is also very important coverage to offer.

Are full-time employees entitled to benefits?

Yes. ALEs with 50 or more full-time equivalent employees must provide health benefits to these workers. There are specific requirements that must be met to be considered full-time, according to the IRS. Keep in mind that your company’s full-time equivalent employee number is based on a combination  of workers who, individually, may not be full-time.

Are part-time employees entitled to benefits?

Benefits are not required for part-time employees, but employers may choose to offer benefits to these workers. Benefits can be a good way to attract and retain top talent, which is especially important now as many companies are faced with what is being referred to as The Great Resignation. Competition for employees is high; benefits can help set companies apart and improve their ability to hire and keep employees on board.

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How many hours can a part-time employee work without benefits?

Small businesses with under 50 employers can choose to only offer benefits to those working 40 hours or more a week. For businesses with more than 50 employees, anyone working more than 30 hours or more consistently each week is legally required to be offered benefits.

How can I find more affordable health insurance coverage?

Our small business clients work primarily in the skilled trades. Margins are thin. Money is tight. They often come to us concerned about the high costs of health insurance and wonder if they can get coverage that is less expensive. Our answer: yes, possible. It all depends on the size and health of their employees. Another option is to add an ICHRA as the main benefit—they set the budget and we work within that budget.

How much do I need to budget for employee benefits?

You’ll like this answer! You can offer employee benefits for as little as $0.00!

How much do benefits typically cost for employees?

Benefit costs can vary widely and will depend on the benefits offered and the levels of coverage. It’s important to know, though, that benefits can be offered for much less than many employers realize.

When can employees sign up for benefit coverage?

While every company is different, most let employees sign up for healthcare benefit coverage when they’re first hired. For employees who choose not to sign up for insurance—like those who may be on a parent’s or spouse’s plan—also may be able to take advantage of other open enrollment periods during the year. It’s important for employees to talk to their HR and benefits representatives to understand these sign-up periods and what options are included in employer-provided coverage.

Is healthcare benefit coverage considered taxable income for employees?

In most cases, no. Employers pick up a percentage of the cost for these plans for their employees, so that coverage is not subject to Social Security, Medicare, or federal unemployment taxes—or federal income withholding.

What are ICHRAs?

ICHRAs—or individual coverage HRAs—are formal group health plans that let companies of all sizes reimburse employees, tax-free, for their individual health insurance premiums and, possibly, other qualifying medical expenses.

What are pre-existing conditions?

Pre-existing conditions are health conditions or issues that employees were experiencing before signing up for healthcare coverage, or before the official start of new coverage. Under the ACA, insurance companies cannot deny individuals or charge more for acceptance into a health plan because of these pre-existing conditions. Some examples include diabetes, asthma, cancer, and high blood pressure.

How do I know if my current benefit package is compliant with local, state, and federal laws?

We can help! To get started, answer some specific questions about your company and current coverage and we’ll provide a full compliance report to help you identify where you may need to add to or adjust your employee benefit plan offerings.

Link to form.