HOW MUCH IS IT GOING TO COST?
That is typically the first question I am asked by business owners when considering offering health benefits to their employees. With the many changes in healthcare and the employer mandates, I find most employers want to be compliant, however, offering an affordable healthcare package is important.
Many employers contribute a percentage of premiums, which requires a minimum of 50% employer contribution of employee-only premium. The percentage of premium is a little more volatile when planning your budget, your contributions will increase as the premiums increase each year at renewal.
Another employer option is a defined contribution. Defined contribution is where the employer’s contribution is a flat dollar amount for each employee. For example, the employer’s contribution is $200 per employee, the employee chooses a health plan that costs $400, the employee would have $200 from the employer, the employee’s responsibility would be $200, which would be payroll deducted.
If your employees pay a portion of their premium, don’t forget to have a Section 125 POP plan in place, this allows the employee’s portion of the premium to be deducted pre-tax, which lowers their taxable income, and in turn, provides a saving on the employer’s Work Comp rates.
If you are interested in getting more detail on defined contribution, give Sky Financial & Insurance Services, to get more information. 916-540-7000
Deep thoughts by Jenny Ebinger