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Capturing and Retaining Employees with Employee Benefits

October 20, 2022

Sponsored by 3000 Insurance Group

Insurance has always been part of protecting your assets, and a small business owner’s greatest asset is their employees. Attracting and retaining employees is key to a successful business. Outside of salary, providing employee benefits is the greatest way to accomplish both.

When it comes to insurance as an employee benefit, employees look at the following in this order:

  • Health
  • Dental
  • Vision
  • Life
  • Disability

Let’s talk about health insurance since it is the most expensive and most desired. As an employer, you can offer health insurance to your employees in a couple of ways. The most common is an Employer Sponsored Plan, which is commonly referred to as group health insurance.

An employee should prioritize as follows when considering a group health insurance plan:

  • Zero or low cost to the employee
  • Co-pays for office visits and Rx
  • Lower out-of-pocket expense
  • Network of providers

Please note: Employer HSA Contributions fall somewhere in the middle if the employer offers.

What are some of the common rules for offering small-group health insurance?

  • Quantity – 1-50 employees based in Oklahoma
  • Participation - 75% of eligible employees must enroll in the plan (Eligible employees are full-time and do not have insurance elsewhere).
    • Example – A firm has six full-time employees. One is insured on their spouse’s insurance. One has Indian health insurance. That leaves four eligible employees. At least three of them must enroll in the group health insurance, which makes the participation at least 75%.
  • Contribution – The employer must pay at least 50% of the lowest cost plan offered. Usually, a firm will offer 1-3 plans. The employer must pay at least 50% of the least expensive plan.

What is a Special Enrollment Period (SEP)?

Since the Affordable Care Act was fully enacted in 2014, there has been a Special Enrollment Period (SEP) effective each January 1st. This SEP must be approved by Blue Cross & Blue Shield each year. It allows a small employer to offer group health insurance effective January 1st without the participation and contribution requirements mentioned above.

However, employers that want to offer group health insurance under the SEP must apply between November 15 and December 15 for a January 1 effective date.  If you apply after December 15, you will not be able to apply under the SEP.

Life/Vision/Disability

These benefits are often inexpensive and sometimes very valued by employees. The enrollment requirements are similar to those for group health insurance. However, sometimes these products can be offered on a voluntary basis, which does not cost the firm any money and provides a valuable benefit to the employees.

Practice tips for offering group benefits

  • Consider offering group benefits if the cost is less than hiring and training new employees. The less turnover a firm has, the more successful the firm can be.
  • Choose 2-3 plans to offer with a low-cost network since that is the least important benefit to the employee. Choose at least one plan with office and Rx co-pays. An additional plan might be a High Deductible Health Plan (HDHP), commonly referred to as a Health Savings Account (HSA) plan.
  • If this is your first time to offer group insurance, consider applying during the SEP period mentioned above for a Jan. 1, 2023, effective date. This way you will not have to worry as much about participation and employer contribution.

If you have questions, please contact Chris Hays at (405) 521-1600 or christopher@3000ig.com to discuss further.