Health Care Benefit Solutions

Leslie Saunders: Simplifi Benefits Frequently Asked Questions

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Are you a business owner? Learn how Simplifi Benefits can work for you!
Are you an employee? See how Simplifi Benefits could save you money!

Any employer who wants to

  1. Increase take home for all (employees and business owner) by lowering FICA/FUTA and Income Taxes
  2. Take care of employees or at least help them take care of their biggest asset – their health
  3. Eliminate the burden and personal responsibility of picking the plan, managing the plan and having to pay for most of it

Please see comparison chart at the end of this FAQ for the differences between Simplifi Benefits and the current approaches.

The general concept is that a company gives each employee a fixed dollar amount (a "defined contribution") for their health care needs. Employees can choose to use their defined contribution to pay for individual health insurance or other medical costs such as doctor visits and prescription drugs. Rather than paying the costs to provide a specific group health plan benefit (a "defined benefit"), employers can fix their costs on a monthly basis by establishing a defined contribution health plan.

Our Simplifi BenefitsSM program has all the elements of a traditional benefit and insurance program but none of the headaches. Employees have the freedom of choice to leverage the entire health care coverage marketplace. We provide each employee with access to personalized insurance consulting, claims negotiations, Customer Advocates, membership in RxRegistry – a leading discount pharmacy program, as well as access to all sorts of additional benefits services and insurance products. All are available at affordable prices and can be paid for directly by the employee.

If an employer simply wants to allow employees to pay for their own policies on a pre-tax basis they will be using Section 125 of the IRS Code. You may have heard of terms such as "Section 125 Plan" or "Premium only Plan" or even "POP" – these simply refer to the section in the IRS Code that allows employees to reduce their taxable income by the amount of the eligible insurance premium.

If the employer wanted to provide a designated amount of tax free funding for the employee-paid insurance policies or eligible expenses, they would be using Section 105 of the IRS code to accomplish this. Section 105 is commonly called a "Health Reimbursement Arrangement" or "HRA".

The Simplifi Benefits solution only take 20 minutes to set up and will take less than a few minutes each pay period to administer. The employer never handles claims – employees submit claims and once they are approved the employer will reimburse them on the next pay period.

No. There is no limit on the amount of money an employer can contribute to an employee's defined contribution health plan. Also, there is no minimum contribution requirement. In other words, you can choose exactly how much money you want to contribute from $0 up to an unlimited amount per month. The only time your benefits program costs go up is when you make that decision to increase the contribution.

No. There are no minimum participation requirements that a company must meet in order to offer a defined contribution health plan. Also, there are no maximum participation requirements. A defined contribution health plan can be offered by a company of any size even if only one (1) employee chooses to participate.

Yes. As long as you treat all "classes" equal. You can divide your company up in classes of employees based on job description, tenure, salaried, hourly, married, single, productivity, etc. You simply need to treat everyone within a given class the same and provide the same contribution levels to all employees within a given class.

That's great! We should be able to help you save money in taxes on your employees' individual heath insurance right now. Employees will receive immediate tax savings and the employer tax savings will offset almost all of the administrative expense.

That's OK. We're glad to see that you are making the traditional approach work. However, do you offer health insurance to all of your employees—part-time, hourly, etc.? If not, we can help those who are not eligible or enrolled in your existing plan, or who are in their eligibility waiting period.

That's OK because this solution can be implemented at any time.

We can work alongside your current broker. That said, your broker may not want you to know about this because they might lose money on commissions if you implement this solution.

Many employers think that as well. However, individual health insurance policies often cost less than half the price of group health insurance for healthy employees. With premium subsidies, even sick employees or those with chronic illnesses can get comparable coverage at a lower cost than most group policies.

A lot of employers, and employees, think that is the case. However, individual health insurance policies can sometimes be better than group policies because they are less costly and can be kept independent of employment. Most people have a choice of hundreds of plans from dozens of carriers. Compare that to the choices you can offer via your traditional employer sponsored plan.

Have you set up plan documents to make this legal and tax free? Federal regulations actually prohibit employers from paying directly for employee's medical expenses, including health insurance premiums, outside of an ERISA-qualified group health benefits plan. If not, it makes sense to invest the small amount of time and money to implement our services

With the passage of health reform and other laws, sick employees (those with chronic or pre-existing conditions) now have numerous ways to purchase individual health insurance on a guaranteed issue basis – and in many cases with premium subsidies based on income. If an employee or member of the employee's family is unable to obtain individual health insurance due to a preexisting medical condition, they will become eligible for individual health insurance in one of the following ways:

  1. If an employee (or a member of an employee's family) is federally HIPAA-eligible, they can purchase an individual health insurance plan through a mechanism provided by the State.
  2. If an employee (or a member of an employee's family) is eligible for a State's risk pool, they can purchase individual health insurance through the State risk pool.
  3. If an employee (or a member of an employee's family) cannot get health insurance for 6 months, they can purchase an individual health insurance plan through the federal risk pool (PCIP).
  4. When a company cancels their group health insurance plan, employees with pre-existing medical conditions often become federally HIPAA-eligible.

More information can be found @ https://www.pcip.gov/