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What are company contribution amounts when picking plans?
Company contributions are the portion of the monthly premium that your company pays for each employee that elects coverage and any enrolled partner/dependent(s).
When does my company pay for premiums?
On the first semimonthly invoice of the month, your company will be billed the entire cost of the plan that your employees are enrolled in for the following month’s coverage. For example, on the first semimonthly invoice of November, you will see employer contribution charges for the total cost of the premiums for December coverage.
In the month of coverage, each employee will be charged the portion of the premium they are required to pay split evenly between the first and second paycheck of the month. This amount will be credited back to your company. To continue the example above, employees will be charged one half of their portion of December premiums on the first paycheck and the other half of their portion of December premiums on their second paycheck. This amount will then be credit back to your company on the corresponding invoice.
What are ‘All at once’ contributions?
‘All at once’ is the method when the company uses the same contribution scheme for all of the medical plans for which the company provides access.
You can choose to contribute a flat dollar amount or a percent.
What does it mean to contribute ‘Individually’?
If you decide to contribute ‘Individually, the company will use different contribution schemes for each of the medical plans the company provides access to.
You can choose to contribute a flat dollar amount or a percent.
Can you contribute ‘Individually’ to dental and/or vision plans?
Contributing ‘Individually’ is not available for dental or vision plans. You may contribute ‘Individually’ for medical plans, but only ‘All at once’ contributions are available for your dental and vision plans.
How much must I contribute?
For medical and dental insurance, Justworks requires a minimum employer contribution of 50% towards the most affordable (cheapest) plan at the Employee only tier. This then becomes the minimum amount your company can contribute to all plans and tiers you choose to offer your team. If you choose to offer more than the minimum amount to the Employee tier of a plan, you must then contribute at least that same amount to dependent tiers of that plan as well.
There is no minimum contribution requirement for vision insurance.
Do I have to contribute the same amount to all employees?
If you have different benefits classes set up, you will have the ability to set up custom contributions for different benefits classes. If your company chooses to contribute to certain groups of employees in different amounts, please note it is your company’s responsibility to ensure that any differential treatment is non-discriminatory.
Please note that if the available benefits, eligibility requirements, and employee premium costs are not the same for all eligible employees, you could put at risk the Section 125 pre-tax benefits for higher-paid employees. Your company is responsible for ensuring that your benefits class system complies with any applicable nondiscrimination requirements and, if applicable, does not negatively impact your company’s strategy for complying with the ACA employer mandate.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.