Defined-contribution plans, when they are offered, allow employers to provide benefits without having to offer a traditional or group health-insurance plan. Businesses will not have to pay the costs associated with a group plan, but instead make monthly allowances that their employees then spend on their own private-insurance plans. This is a good solution for many smaller-sized businesses because employees can choose the plan that fits them the best. These plans also have lower costs and are more affordable since the company can set its own prices.
A company should consider these three factors prior to deciding if this is the right health-insurance choice.
• Should you offer a small-business insurance-coverage plan that is more traditional, otherwise known as a small-group plan?
• Should you offer a health-care allowance to reimburse employees for their own individual health-insurance plans?
• Should you offer no insurance coverage to your employees?
These options might seem like a lot to think about; however, when making the best decision for you and your employees, you can ensure that you have the right coverage without having to worry about a thing. This information will allow you to get the most out of what is offered.