Employee Benefits

Level funded health plans are essentially pre-packaged self insured health plans. They charge “level” or fixed monthly premiums to the employer group. However, in many cases, they also offer a percentage of unused premium credits back to the employer if medical loss ratios are below 100%. Level funded plans have grown significantly in popularity and are now offered by nearly all insurance carriers.

Historically, self insured plans were only the utilized by Fortune 500 employers, such as Coca Cola. However, over the years, they have made their way down-market and are now relevant for companies with at least 100 employees.

With a self insured (or self funded) health plan, employers operate their own health plan. The idea is that the profit margin that the insurance carriers normally pocket could mean substantial savings for the employer. Self insured plans, however, require a heightened level of management and more risk than a fully insured health plan.

There are two main costs to consider: fixed and variable.

• Fixed costs include administrative fees, stop-loss premiums, and any other set fees charged per employee. These costs are billed monthly by the TPA (third party administrator) or carrier, and are charged based on plan enrollment.
• Variable costs include payment of health care claims. These costs vary from month to month based on health care use by employees and dependents on the plan.

Most employers use some form of stop loss insurance which reimburses the employer for claims that exceed a predetermined level, so that there is a cap on the risk the employer assumes. Stop loss coverage is usually purchased to cover catastrophic claims on one covered person (specific coverage) and to cover claims that exceed the expected level for the entire group (aggregate coverage).

Dental insurance coverage:

• Preventive care: Routine dental exams and cleanings typically take place every six months and are covered in full by most dental insurance policies.
• Restorative care: Restorative care consists of any minor procedures to treat damaged or decayed teeth, such as fillings.
• Endodontics: More advanced damage or decay will require more involved procedures like root canals.
• Oral surgery: Common oral surgeries include teeth removal, the drainage of infections, and gum tissue biopsies.
• Orthodontics: This includes the installation, maintenance, and removal of braces and retainers.
• Periodontics: Periodontics involves the treatment of gum disease, infections, and lesions.
• Prosthodontics: Fittings and installations of dentures and bridges can be expensive, and you will need a quality insurance policy to help alleviate this cost.

Vision insurance coverage:

• Eye exams: This is a preventative care measure that can be instrumental in providing an early detection of eye disease, any developing vision problems, or a need for corrective lenses.
• Eyewear: Glasses and contact lenses can be expensive but are often at least partially covered by vision insurance. Sometimes, even prescription sunglasses may be covered.
• Lens coating and enhancements: Some vision insurance plans can help with the cost of a lens coating. Lenses can be coated with substances to decrease scratching, fog and moisture, reflections, and exposure to ultraviolet rays.
• Surgery: Surgeries that are deemed medically necessary, such as a procedure to treat an eye injury, infection, or disease, will often be covered by a health insurance plan. But corrective surgery, such as LASIK, is generally not covered by health insurance because it is deemed by many insurance providers to be an elective or “cosmetic” surgery. However, there are some vision insurance plans and discount programs that will partially cover such elective procedures.

Group life insurance is a type of life insurance in which a single contract covers an entire group of people.Typically, the policy owner is the employer, and the policy covers the employees or members of the group. Group life insurance is often provided as part of a complete employee benefit package.

In most cases, the cost of group coverage is far less than what the employees or members would pay for a similar amount of individual protection. If you are offered group life insurance through your employer or another group, you should usually take it, especially if you have no other life insurance or if your personal coverage is inadequate.

Disability insurance is a must-have part of your financial safety net, as important as life insurance or an emergency fund. Disability insurance protects your income when you’re unable to work due to illness or injury. There are two types of disability insurance: long-term and short-term.

Short-term disability lasts 3-6 months and can cover up to 80% of gross monthly income. Long-term disability can last 2, 5, or 10 years or even until retirement and can cover up to 60% of gross monthly income.

A 401k is an employer-sponsored retirement plan. Here are some reasons why employers set up 401k plans:

• Recruit and retain: Offering a competitive 401k plan can give you an extra edge in recruiting and retaining talent. Attractive benefits are a must to keep your best people.
• Incentives: Many organizations tie contribution levels to specific goals. When employees hit a certain benchmark, they are rewarded by an increase in 401k contributions as a way to incentivize performance.
• Tax deduction: Matched contributions and administrative work associated with the benefits plan are tax-deductible.