over the past few years, you may have heard of a plane Article 105.
and as you may know -being little to nothing about this type of plan, it is important for you to understand what it is. Why? As a small business owner, if you are currently offering a health insurance plan sponsored group, or nothing at all, a plan of Article 105 could be a great advantage for you and your employees.
So what is the difference between a plane of section 105 and a health insurance plan sponsored group? This article will help you understand a plan of section 105, particularly article 105 Shot reimbursement of medical expenses , and how it differs from other benefits health, such as health insurance sponsored by plane group.
a simple breakdown
To better help you understand the difference between a Section 105 plan reimbursement of medical expenses and a group - health insurance plan sponsored, it is important to know each plan its basic form.
What is a repayment plan for medical expenses Section 105?
a Section 105 Plan for reimbursement of medical expenses is a benefit funded health employer. The employer determines the specific amount contributed (but does not dictate the exact benefit of health).
What is a health insurance plan sponsored group?
With a health insurance plan sponsored group fixed the employer providing specific health (vision, dental, life insurance, etc.)
to better understand how they differ, let's look more closely at each.
Section 105 Plan reimbursement of medical expenses
a medical reimbursement plan Section 105 is a new way of thinking about health insurance for employers. In its purest form, a company offers its employees a health insurance allowance or "contribution" to spend on their own individual health insurance - at a cost that the company's controls - rather than providing the actual plolicy health insurance
Think of a section 105 Plan for reimbursement of medical expenses as a grant or a gift card to use for health insurance. The benefit is administered by a reimbursement software provider to comply with various federal regulations.
To help you better understand a Section 105 Plan reimbursement of medical expenses, this is kind of advantages and disadvantages Plan.
more
flexibility Section 105 Medical Reimbursement plans are very flexible for employers. They can be designed to meet your budget, health benefits, and hiring needs. You decide how much you want to contribute to employee health care reimbursement allowance. You can distinguish the different benefits for different categories of employees, and
Cost control :. You have the funds and the plan is fully funded by the employer. Refunds are issued only to employees once they show a valid medical expense
Cost reduction :. A Section 105 Plan reimbursement of medical expenses you can deduct reimbursements as a business expense and exclude the wages. Employees save 20-40 percent on medical expenses using pre-tax dollars rather than after-tax dollars.
Cons
limited tax benefits for some homeowners: certain types of business owners receive tax benefits limited reimbursement by a section 105 Plan for reimbursement of medical expenses
employer must meet to avoid fines. Section 105 plans are subject to compliance rules, which if not followed can result in expensive fines. To make sure your understanding is correct, and make compliance easy, use a software administrator Section 105.
Health Insurance Plan Sponsored Group
A group sponsored health insurance plan is the traditional way we think about health insurance for employers. A company offers its employees a defined benefit health care - doctor visits, hospitalization, pharmacy and so on -. Often uncertain annual cost
The benefit is administered by a group employer-sponsored plan benefits health.
To help you better understand a sponsored group health insurance plan, this is what kind of advantages and disadvantages of the scheme.
Benefits
Plan Options :. You can search for available plans to choose the insurance company, and choose the plan options for employees
warranty coverage :. coverage is guaranteed by the issuance to employees, which means that no individual underwriting
Cons
Note the changes: employer's health insurance rates are renegotiated annually based on healthcare costs in the previous year the group.
Minimum Shareholding: There are certain minimum participation requirements. Employers can share the cost of premiums with employees, but there is minimal amounts of contributions for employers.
Conclusion
Now, knowing some details of a section 105 reimbursement scheme for medical expenses and a regime 'sponsored group health insurance, how do they differ?
a medical reimbursement plan Section 105 is an employer defines how much they want to contribute to the individual health insurance premium for employees as a benefit. A health insurance plan sponsored group is when an employer defines the benefits of their employees have under a group health insurance policy.
What kind of diet fits your small business better as a health benefit? Comment below
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