Small Company Employee Benefits

Question 1

Small Company Employee Benefits

Why is Group Medical Challenging for Small Companies?

Answer 1

• If fully insured, they are subject to state-mandated plan options
• Plans must use options available in small geographic area
• Provide documentation so insurers can verify not just banding together of people solely to obtain insurance

Question 2

Small Company Employee Benefits

Reasons why Small Company Should Require EE Contributions for Medical

Answer 2

• EEs are accustomed to paying some level of contribution
• Motivates EEs who have coverage elsewhere to decline their small ERs plans
• Changing to contributory plan at later date can create EE ill will
• To avoid legal problems when EEs opt out of noncontributory plan