Group Benefits

Named for the Tax Code section that governs them, 401(k) plans are the most popular employer-sponsored retirement plans in the U.S. For the most part, they have replaced the pension plans employers once provided for employees.

About 401(k) Retirement Plans

As a feature of a qualified profit-sharing plan, a 401(k) allows your employees to contribute portions of their salary to individual accounts. Except for designated Roth deferrals, which are handled differently, these deferrals are excluded from the employees’ taxable income. When the employee retires, distributions, including earnings, from a 401(k) account are taxable income for the employee.

Employers can contribute additional funds to employee 401(k) accounts. To the extent that they do not exceed certain limitations, as described in the Internal Revenue Code, these contributions are deductible on the employer’s federal tax return.

Types of 401(k) Plans

Employers can choose from several types of 401(k) plans, each with its own specific rules.

Traditional 401(k)

This plan allows for payroll deductions of pre-tax deferrals from eligible employees. Employers have the option to make contributions matching employee deferrals, to contribute on behalf of all participants, or both.

Safe Harbor

In a safe harbor 401(k) plan, employer contributions are fully vested at the time they are made. Employer contributions may be matching contributions to employee deferrals or made on behalf of all eligible employees, even those who did not defer funds.

Simple 401(k)

This type of 401(k) provides a cost-efficient means for small businesses to offer a retirement plan to their employees. It is not subject to annual nondiscrimination tests. Employers are required to make fully vested contributions.

Choosing a 401(k) plan can be a complicated process. Our agent at Sean Crisp & Associates Insurance Agency in Modesto, California, can help you select a plan that is right for your company.

A health flexible spending account (FSA) can be included in the benefits package employers offer to employees. This type of plan allows employees to set aside pre-tax dollars to use for eligible medical expenses. Our agent at Sean Crisp & Associates Insurance Agency in Modesto, California, can help you set up an FSA plan for your company.

How Flexible Spending Accounts Work

With flexible spending accounts, an elective portion of the employee’s salary is set aside before taxes. Throughout the plan year, the employee can use the set-aside funds to pay for a variety of health care expenses, including deductibles, copays, and coinsurance. Because the funds are tax-deferred, employees save money on out-of-pocket expenses for medical services and medications.

Why Flexible Spending Accounts Are a Good Idea

FSAs benefit both employers and employees. They are an attractive addition to an employee benefits package to help companies recruit and retain top talent. Employees do not pay taxes on the portion of their salaries set aside for a flexible spending account, and that increases their take-home pay and tax savings.

Employer contributions are tax-deductible when they are paid to an FSA plan participant to reimburse an eligible expense. In addition, as FSA deferrals lower the amount of an employee’s adjusted income, they also reduce the amount of matching employer FICA contributions and federal unemployment tax.

Cost of a Flexible Spending Account Plan

Employers typically pay an annual fee for a flexible spending account plan, plus a monthly charge per employee. The cost to your company can depend on several factors, including your business location and the number of people you employ. An agent at Sean Crisp & Associates Insurance Agency can help you find an FSA plan that is appropriate for your business and the bottom line.

Group dental insurance is an important benefit that will be very appreciated by your employees. A quality dental benefits plan can be helpful in recruiting and retaining talent. Good oral health is known to be a factor in various other medical conditions that may eventually impact employee performance. If you would like to include group dental insurance in your employee benefits package, an agent at Sean Crisp & Associates Insurance Agency in Modesto, California, can assist you in your search.

Benefits of Group Dental Insurance

Dental care is costly, and many employees consider dental insurance as an essential benefit. Dental coverage can be a worthwhile business investment to help your company attract and retain high-performing, engaged employees.

Dental coverage can be customized to your company’s business goals and budget to help cover the cost of employee dental services, including:

• Checkups
• Cleanings
• Fillings
• Crowns
• Root canals

It is important to find a plan that gives you the flexibility to customize dental insurance to fit your company’s and employees’ needs. With group dental insurance, employers have options to pay all, part, or none of the employees’ benefits.

Group Dental Insurance Costs

The cost of group dental insurance can vary widely based upon the number of employees, the location of the business, and the form of coverage you choose. Employers can lower their costs by contributing a specific percentage of plan premiums and allowing employees to opt-in or out of the plan. Our agents at Sean Crisp & Associates Insurance Agency are well-versed in employee benefits, including group dental insurance. Work with us to find the right fit in a group dental plan for your company.

Group disability insurance is provided in a single policy that covers an entire company or group. It can be a valuable part of an employee benefits package that serves to protect your company’s most valuable asset – your employees. An agent at Sean Crisp & Associates Insurance Agency in Modesto, California, can work with you to structure a group disability program to suit the needs of your company or group.

Group Disability Insurance Options

Disability insurance is private insurance designed to replace a portion of an employee’s income in the event of a disabling illness or injury. Employers can choose from a range of insurance options. The basic types of group disability insurance are short-term and long-term.

Short-Term Disability Insurance

Short-term disability (STD) replaces a portion of income for a limited period after the disabled employee has exhausted the available sick leave. Depending on the plan, STD will pay out benefits for anywhere from 9 to 52 weeks.

Long-Term Disability Insurance

Long-term disability (LTD) replaces a portion of a disabled employee’s income after the employee has used up both sick leave and short-term disability benefits. The duration of the payouts varies depending on the plan. Some LTD policies will payout for a certain number of years (such as 2 to 5) or until the disabled employee reaches a certain age (such as 65).

Group Disability Insurance Costs

The cost to employers for group disability insurance typically ranges between 0.25% and 0.5% of total compensation, whether there are two employees or 2,000. This makes it a good investment for small business owners from an employee recruitment and retention standpoint. Various factors may affect the cost of disability insurance. Our agent at Sean Crisp & Associates Insurance Agency can help you find the coverage you need at the lowest available rates.

Although group health insurance is an important part of your employee benefits package, committing to a particular carrier can be a major undertaking. The health of your employees – your most valuable asset – is impacted by the decisions you make. With the rising costs of healthcare, employers walk a fine line between cost containment and providing valuable benefits to attract and retain top talent. At Sean Crisp & Associates Insurance Agency in Modesto, California, insurance is what we do. We can assist you with your group insurance needs and help you optimize your health plan RFP.

Cost of Group Health Insurance

Once your application has been approved, the insurance company will assess your group based on criteria including the location of your business, the size of your company, and the age of your employees to arrive at a final rate. Since the Affordable Care Act was passed, employee health and pre-existing conditions no longer affect group health insurance rates.

Group Health Insurance Tax Advantages

Small business owners may be eligible for tax credits up to 50% of employer contributions to employee health insurance premiums. Under the Affordable Care Act, businesses with fewer than 50 full-time employees are not required to provide group health benefits and will not face any tax consequences if they do not offer these benefits. However, companies that employ 25 or fewer employees who earn an average annual wage under $50,000 are eligible for special tax credits, provided the employer contributes a minimum of 50% of employee insurance premiums.

As of 2016, under the Act, employers with 50 or more full-time employees are required to provide affordable health insurance to employees or pay a tax penalty. Our agent at Sean Crisp & Associates Insurance Agency can help you select the right group health insurance plan with an eye to the bottom line.

Group life insurance can be an added benefit you offer your employees. This type of life insurance is offered by an employer to employees, typically as part of a larger group benefits package. As the coverage is purchased from the provider on a wholesale basis, the costs for each individual worker can be significantly lower than the cost of purchasing an individual policy.

How Does Group Life Insurance Work?

With group life insurance, the employer purchasing the policy for its workers retains the master contract. Employees may not be required to pay anything out of pocket to receive policy benefits, or they may have a portion of the premium deducted from pay. Employees who elect coverage under the group policy will receive a “certificate of creditable coverage.” When an employee leaves the company and terminates coverage, he or she will need to provide this certificate to subsequent insurance companies.

Types of Group Life Insurance

Employers have a variety of options when selecting a group life insurance plan. Types of group life insurance include:

• Term Life: Provides a cost-effect safety net for a set period of time.
• Whole Life: Provides portable coverage, accumulates cash value, and pays a benefit on the death of the insured.
• Universal Life: Portable and permanent life insurance that builds cash value.

Cost of Group Life Insurance

Employers typically pay a certain amount for every $1,000 in coverage per employee. The cost of the premiums will depend on a number of factors, including:

• Coverage amounts
• Medical underwriting requirements
• Type of business
• Number of employees
• Employee gender
• Employee age

Our agent at Sean Crisp & Associates Insurance Agency in Modesto, California, can help you shop for the group life insurance coverage that offers the most favorable benefits at the lowest rates.

More employers, organizations, and associations than ever are providing group long-term care (LTC) insurance for employees or members. With today’s aging workforce, long-term care protection has become a very real concern. A group long-term care insurance plan can provide significant advantages for employers and employees, as well as tax incentives for small businesses. Get in touch with our agent at Sean Crisp & Associates Insurance Agency in Modesto, California, to discuss your company or group’s long-term care insurance needs.

Advantages of Group Long-Term Care Insurance

Group long-term care insurance advantages include streamlined health underwriting and discounts. There can also be significant tax benefits for small businesses that offer long-term care insurance to their employees. In larger businesses, LTC insurance can be included in an employee benefits package as part of a strategy to recruit and retain the top talent, contain costs, and enhance employee productivity.

Employer-sponsored long-term care programs can be 100% voluntary, which means the entire premium is paid by the employee. When offered on a voluntary basis, LTC protection can provide significant benefits to employees at no cost to the company. Additionally, employer contributions to group long-term care premiums are deductible as a business expense.

Group Long-Term Care Insurance Discounts

Insurance companies offer premium discounts to employees, spouses, and extended family members on employer-sponsored long-term care insurance plans. Even when the program is 100% voluntary, a group long-term insurance policy can save significant amounts for employees. Contact our agent at Sean Crisp & Associates Insurance Agency in Modesto, California, for assistance in providing this important benefit to your employees or members.

It is well known that employees want health insurance benefits. According to recent surveys, employees value health benefits second only to monetary compensation. Group vision insurance offered along with health and dental insurance can enhance the value of your benefits package and help you attract and retain the top talent your company needs. Our agent at Sean Crisp & Associates Insurance Agency in Modesto, California, can help you find the right group vision insurance for your company.

Why Offer Group Vision Insurance?

Millions of Americans, including workers, have vision problems that affect their overall health and productivity. Regular vision care can treat existing problems, and it also contributes to the early detection and prevention of serious health conditions, such as diabetes and hypertension. Providing vision insurance is also a good investment from a recruitment and retention standpoint.

Types of Group Vision Coverage

An agent at Sean Crisp & Associates Insurance Agency can help you determine the best type of vision coverage for your employees. Options include managed care and scheduled coverage.

Managed Care Vision Coverage

This type of coverage provides greater flexibility and lower out-of-pocket expenses within an established network of providers.

Scheduled Vision Coverage

Advantages of this type of coverage include: No deductibles, copays, or networks; freedom to choose your own provider; and discounts for using select providers. Scheduled vision coverage helps you contain costs and allows you to set specific price points for specific procedures, which makes it easier to manage your plan.

Cost of Group Vision Insurance

Vision coverage costs vary, depending on where your business is located and how the program is designed. Our agent at Sean Crisp & Associates Insurance Agency in Modesto, California, can help you compare shop providers to ensure that you get the best value for the right group vision insurance coverage.

A Health Reimbursement Arrangement (HRA) is also known as a Health Reimbursement Account. It is an employer-funded, IRS-approved, tax-advantaged health benefit plan, as well as a great method by which to provide health insurance benefits to employees. An HRA allows employees to pay for a variety of medical expenses not covered by health insurance.

How Health Reimbursement Arrangements Work

Not to be confused with health insurance, an HRA reimburses employees for individual health insurance premiums and out-of-pocket medical expenses. To provide a reimbursement, the employer makes contributions to the employee’s account. Health Reimbursement Arrangements are notional, which means that the employer reimburses employees directly only after they incur eligible medical expenses.

There are limits on how much employers can contribute to certain HRAs. For a Small Business HRA, annual employer contributions have a cap for each employee. The cap may be different for employees who are single compared to employees with families.

Eligible expenses in a Health Reimbursement Arrangement are all qualified medical expenses under Section 213 of the Internal Revenue Code, including personal health insurance premiums. However, employers may restrict reimbursable expenses under their own HRA plan, within IRS guidelines.

HRA Benefits to Employers

HRAs are often provided in conjunction with high-deductible health insurance plans that have lower premiums, which saves an employer money. In addition, all employer contributions to HRAs are 100% tax-deductible for the employer and tax-free for the employee.

Health Reimbursement Arrangements are flexible plans that allow employers to provide valuable employee benefits while controlling costs. Contact an agent at Sean Crisp & Associates Insurance Agency in Modesto, California, to discuss an HRA plan for your company.

A Health Savings Account (HSA) is a great way for employees to reduce their taxable income and save on medical expenses. It is a tax-advantaged savings account to pay for qualified medical expenses only available to those who are enrolled in a high-deductible health insurance plan.

Benefits of Health Savings Accounts

Combining tax benefits on savings with lower insurance premiums, HSAs have advantages for both employers and employees.

HSAs are offered in conjunction with high-deductible health plans, which can save employers money on insurance premiums. Employer contributions to employee HSAs may be deductible on federal corporate income tax returns for the year in which they were made. HSAs enhance an employee benefits package, which can help employers attract and retain the best workers.

Employees have the benefit of tax-free withdrawals from their HSA accounts to cover qualified medical expenses. They can make pre-tax payroll contributions to their HSA account. As funds accumulate, the account can provide tax-advantaged savings for the employee’s medical needs in the future. There is no “use it or lose it” policy as with flexible spending accounts. Employees can continue earning interest year after year, tax-free, on their HSA funds.

The money in a Health Savings Account belongs to the employee. Whether they change jobs, switch to a different health plan, or retire, employees can continue to use their HSA accounts for tax-deferred savings or to pay for qualified medical expenses.

The cost of providing HSAs for your employees can depend on a number of factors. Contact an agent at Sean Crisp & Associates Insurance Agency in Modesto, California, for assistance establishing the most beneficial Health Savings Accounts.

It’s no secret that providing traditional group health benefits to employees can be complicated and costly. Health Reimbursement Arrangements (HRAs) have helped to address the situation and control costs; however, when the Affordable Care Act (ACA) became law in 2010, the ability for businesses to offer HRAs to employees for individual policies became limited. The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) came later in 2016 but still has its roadblocks by only allowing businesses with less than 50 employees to qualify and limiting how much employers can reimburse employees each year.

In the summer of 2019, an Executive Order was released to offer more flexibility and budget control for businesses and organizations of all sizes through the Individual Coverage Health Reimbursement Arrangement (ICHRA), an HRA option first offered on January 1, 2020.

What is an ICHRA?

As briefly mentioned above, an ICHRA is an ACA-compliant federal ruling that allows companies to reimburse employees for their individual health insurance through a monthly, tax-free allowance.

With ICHRAs, you can choose how to distribute your funds, whether on an individual basis or based on various classes (i.e., full-time, part-time, and seasonal employees, geographical location, etc.).

Any business, non-profit, organization, etc., with at least one W-2 employee that does not already offer a QSEHRA or an Excepted Benefit Health Reimbursement Arrangement (EBHRA) can offer an ICHRA to their employees.

Employers cannot offer both an ICHRA and a QSEHRA because the former is considered a group health plan, and thus, is not compatible with the latter. An ICHRA and an Excepted Benefit Health Reimbursement Arrangement (EBHRA) can both be offered by the same employer, but not to the same class of employees. This is because EBHRAs must be offered with a traditional group plan.

Unlike the QSEHRA contribution limitations, the ICHRA offers businesses the flexibility to choose how much they contribute to individual monthly premiums and out-of-pocket medical costs for each 12-month plan year. There is neither a minimum nor maximum annual contribution requirement you have to meet with this type of HRA nor a minimum participation requirement.

How does ICHRA work?

Under an ICHRA plan, employers determine each employee’s or class’ reimbursement allowance. Employees then opt to purchase an individual health plan of their choice (ICHRAs can also reimburse Medicare plans, either Part A and B or Part C) and pay for their own insurance premiums and medical expenses.

Employees can submit claims for their medical costs like copays and deductibles for employer reimbursement up to their allowance amount. Employers only pay funds after they have approved an employee’s reimbursement claim, and all reimbursements are payroll and income-tax-free. Unused allowances accrue from month to month; however, any unused funds at the end of the year are kept by your company or organization. You have the option to carry over those funds or reset them annually.

To best strategize contributions and group health benefits overall, employers can offer different classes of employees different group health plan options. For example, an employer can offer ICHRA to full-time employees and a traditional HRA to part-time employees, but no one employee or class of employee can receive both plan options.

ICHRA Benefits

There are several benefits of incorporating ICHRA plans into your overall group benefits package for both employers and employees.

ICHRA Benefits for Employers

• Great for All Company Sizes: Unlike the QSEHRA, an ICHRA is not limited to companies with 50 or fewer employees.
• Cost Savings: With an ICHRA in place, you don’t have to provide a traditional healthcare plan.
• Control of Costs: Employers pre-define their allowance budgets for each employee or class of employees.
• Flexible Plan Options: Design and strategize your health plan with no minimum contribution requirements or participation requirements.
• Tax Benefits: All reimbursements given to employees are tax-free and are 100% deductible as a business expense.
• Attract & Retain Top Talent: By offering more flexible health coverage options and reimbursements, your company can attract and retain high-quality candidates.
• ACA Compliance: These plans meet ACA requirements such as minimum essential coverage, affordability, and minimum value.

ICHRA Benefits for Employees

• Cost savings: Reimbursements from employers help make individual health plans more affordable for employees.
• Tax Benefits: Health insurance premiums under an ICHRA are tax-free.
• Flexible Plan Options: Employees have the freedom to select an individual health insurance policy that best suits their needs.
• Transferrable Plans: Because the individual purchases his/her own plan, they can take the health plan with them if they change careers.
• Quick & Easy Reimbursements: The process to submit a claim and receive reimbursement for eligible medical expenses is quick and easy.

Offering the right group benefits is essential to attracting and retaining top talent. But our team at Sean Crisp & Associates Insurance Agency also knows you want to offer group health benefits in a cost-effective and efficient way. Give our local Modesto agents a call to discuss whether an ICHRA is right for your company or organization.

If you own a small business or non-profit organization with less than 50 employees, the Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) might be a good healthcare plan option for you.

What is QSEHRA?

Also known as a small business HRA, the QSEHRA was established in 2016 as a quicker, more efficient HRA that allows small business to offer a standalone HRA again after the Affordable Care Act (ACA) limited these plans, deemed them unlawful, and placed daily excise taxes on employers with HRAs.

The QSEHRA does have a few setbacks, such as limits on how much employers can reimburse their employees and less flexibility than the Individual Coverage Health Reimbursement Arrangement (ICHRA) in offering different allowances to various classes of employees. QSEHRAs also restrict organizations from offering a group health plan as well, such as a flexible spending account (FSA) or SHOP coverage.

Nonetheless, if your employees have a wide array of health insurance policies and situations such as short-term, sharing ministries, Medicare, or utilizing a spouse’s or parent’s plan, a QSEHRA might be of more value to your team than an ICHRA.

How does QSEHRA work?

As a small business, you can set up a QSEHRA at any time. You’ll need to set your employees’ annual reimbursement allowances under the legal limitations outlined by the IRS each year. You can also offer different allowance amounts based on employee age and family size.

Once employees incur medical expenses like premiums, copays, and deductibles, they can submit a claim for reimbursement approval up to their monthly allowance and/or set up a recurring claim.

Reimbursements from the employer are payroll-tax-free and 100% tax-deductible. Employers can allow QSEHRA allowances to roll over each month and/or each year for their employees, so long as the reimbursements made never exceed the annual limit.

Full-time employees and their families are automatically eligible for QSEHRA reimbursements, and as the employer, you can determine whether you want to extend eligibility to your part-time employees as well. Keep in mind, your reimbursement allowances cannot differ between part-time and full-time employees with a small business HRA. Only participating employees with the minimum essential coverage (MEC) can receive their reimbursements tax-free.

QSEHRA Benefits

QSEHRA plans offer many small businesses and their employees a number of benefits.

QSEHRA Benefits for Employers

• Cost Control: You set employees’ reimbursement allowances up to your organization’s maximum limit each year so you never go over budget.
• Attract & Retain Top Talent: Offering QSEHRAs as a small business helps you stand out in the industry while attracting and retaining top candidates.
• Payroll Tax Benefits: All reimbursements are tax-free for employers, and reimbursements are also 100% tax-deductible for employers.

QSEHRA Benefits for Employees

• Income Tax Benefits: Participating employees with MEC are eligible for income-tax-free reimbursements.
• Delivers More Value: No matter if they are on a spouse’s plan, a sharing ministries plan, or even a short-term plan, employees can receive reimbursements through the QSEHRA plan.
• Plan Flexibility: Employees have the freedom to choose the individual health plan that fits their lifestyles.
• Cost Savings: QSEHRAs help to reduce out-of-pocket costs for eligible employees.

If you are still trying to determine if a QSEHRA is right for your small business or organization, give our local agents a call at Sean Crisp & Associates Insurance Agency in Modesto, California. We can help you strategize a healthcare plan that delivers the most value to all of your employees collectively, no matter their individual circumstances. We look forward to speaking with you!