Each year, the CEO sit with their advantages 
staff administration to review the annual budget of the company. Projections are made for income, financing and spending. Too often, which includes health increases by 10 percent, 20 percent or more.
To get control over the budget of the company's health care, many administrative staff propose a switch of the group health insurance coverage to a Section 105 medical reimbursement plan. Section 105 plans are the basis for individual health insurance reimbursement.
Why the switch? Individual reimbursement of health insurance is a smart way to control costs while providing employees with a benefit for the valuable and appreciated health. Small businesses work hard for every penny the company brings. This approach allows healthcare dollars go further.
This brings us to where you are today. Your HR staff is ready to make the switch, but how do you explain a plan to the Chief of section 105? Here are eight quick topics to start the conversation.
1. A plan of section 105 is an official health benefit
The use of a plane of section 105, the company offers a formal service tax-efficient employee health. But, it works a little different than offering traditional health insurance coverage.
Instead of contributing to a group health insurance policy, the company uses a Plan Section 105 to give employees an allowance to spend on health insurance. Employees buy their own health and are reimbursed by the regime of Article 105
Related: Individual Health Insurance Reimbursement - An Overview
The 2 .. employees have access to quality assurance of health
the employees of medical and financial needs. A one-size-fits-all health insurance policy does not always meet the unique needs of your workforce. With a repayment program, employees choose a plan and choose their carrier, physicians, and the level of coverage.
The use of a plane of section 105, the company gives employees a "budget" to spend on health insurance.
Related: Why Benefits of Individual Health Insurance employees of small businesses
3. the costs of health care are reduced by 20 to 60 percent
with a plan of Article 105 sets the business and controls the amount of the contribution and, on average, the individual health insurance costs up to 60 percent less than the insurance -maladie group in each state.
These two factors create cost savings and predictability of costs for small businesses
Related :. insurance cost comparison tool
4. The costs are controllable and predictable
With a rebate program, there are no unpredictable annual increases and no minimum requirements contribution. Any budget increase or decreases are in the hands of the company.
This type of model provides cost predictability and accountability.
5. Employee costs are lower, too
On average, employees will pay less out of pocket for the same coverage. As mentioned earlier, individual health insurance costs less, and eligible employees can receive federal grants to reduce their premium more.
6. The advantages can be adapted to support HR business goals
The company can adapt the plan of section 105 to achieve its objectives of recruitment and retention. For example, the company can design in terms of section 105 to provide different amounts of allocation by employee group and / or family status
Related :. Section 105 of the sample Plan reimbursement of medical expenses
7. Using a map to Article 105, the repayments are tax
Like for contributions to a group insurance plan, repayments through a section 105 plan are not taxable.
8. Software facilitates administration and compliant
Companies use Article 105 Software (as PeopleKeep) to administer the health care system in 5 to 10 minutes per month.
Software also automates compliance with the ACA and other federal requirements (ERISA, HIPAA, IRS, and COBRA if applicable)
Tip -. This eBook can also help CEOs or presidents of the company understand the concept. Download the free PDF here.
Conclusion
While companies spend anyone reimbursement of health insurance, it is common for administrative staff, management and employees to have questions about what a Section 105 Plan is and how it works.
What additional questions do you have? Leave a question below.
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