Health   Dental   Vision   Life   AD&D   Short-Term Disability   Long-Term Disability   Long-Term Care   401(k)   403(b)   Cash Balance   529 College Savings   Key-Man   Buy-Sell Agreement   Non-Qualified Retirement   Group VUL   Flexible Spending Accounts   Dependent Care   Transit Plans   State Continuation   COBRA Administration   Payroll   Online Enrollment   HRIS  Wellness   Predictive Modeling

HEALTH & WELFARE

Companies provide fringe benefits to attract and retain valued employees.  Group benefits allow for employees to protect themselves and their families with easy access to preventative care and from the financial risk of catastrophic illness and injury.  Other benefits help with financial planning for the future.  In addition, companies may utilize the tax code so employees can leverage their payroll dollars towards these benefits.  The major benefits offer by companies are:


A company has a lot of flexibility with developing a benefits package for its employees.  There are supplemental plans to augment medical, life, disability, long-term care, and other types of insurance on an employer-paid or totally voluntary basis.  In addition, a company can create its own benefits package based on a "Defined-Benefit" design.  For example, a company can cap the total benefit amount per employee and establish the eligible expenses that will be paid on a reimbursement basis.  These types of plans provide the maximum flexibility to the employee while helping the company controls costs.


Other Products and Services

In addition to the traditional benefits, Bridgeport Benefits Advisors can help you implement other types of benefits or systems to assist with benefits administration:

  •    COBRA Administration
  •    HRIS
  •    Payroll
  •    HR Consulting
  •    Wage Determination (Davis-Bacon)
  •    Non-Discrimination Testing
  •    5500 Filing
  •    Summary Plan Description/Wrap Document


Common Problems

  • Many companies do not have plan documents for their Section 125 plans.  These include the POP plan allowing the pre-tax payroll deductions for health and welfare contribution.  If audited, your plan may lose its qualified status and you may incur a penalty and have a multi-year tax problem.

 

  • Many companies, and accountants, do not know that owners of S Corps and LLCs, being pass-through entities, cannot receive a tax-free company contribution towards their benefit premiums.  Owners also cannot participate in any Section 125 plans.

 

  • Immediate family members of S Corps and LLCs owners may not participate in any Section 125 plans or receive a tax-free contribution towards a company paid benefit premium.

 

  • Domestic Partners (DP) cannot receive a tax-free benefit.  The employee must pay taxes on any benefit provided to the DP. 

 

  • Participation in most medical plans must exceed 75% of all eligible employees or your contract may be in jeopardy of being canceled.

 

  • Groups with more than 100 enrolled in any ERISA plan must file a 5500.

 

  • Any group using a dedicated bank account to fund a Section 125 plan must file a 5500.

 

  • When providing voluntary work-site products (e.g., critical illness, accident, cancer policy) we strongly recommend you do not deduct premiums on a pre-tax basis (even tough this is strongly suggested by some brokers).  Employees, who participate in a pre-tax payroll deduction plan for benefits (POP Plan), cannot stop the deductions unless it is the end of the plan year or if there is a qualifying event.


For more information, please contact Bridgeport Benefit Advisors.
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The material on this page is intended as general descriptions of the concepts presented.  It is for educational purposes only and it not intended to provide specific financial or tax advice.  These descriptions cannot take into account your specific conditions and situation including the data required for underwriting purposes, financial circumstances, risk tolerance, and other factors.