by admin | Jul 15, 2025 | Custom Content, Employee Benefits
Want to attract and keep top talent? Your benefits package is crucial! Think beyond just health and retirement. Fringe benefits like Dependent Care Assistance Programs (DCAPs) offer real, meaningful support, especially for employees caring for kids or dependent adults.
What is A DCAP?
A DCAP – also known as a dependent care flexible spending account (DCFSA) (since it functions similarly to a health flexible spending account (FSA)) – helps to ease the financial burden. This program allows employees to set aside pre-tax dollars specifically for eligible dependent care expenses, providing a substantial financial advantage. Through convenient payroll deductions, employees contribute pre-tax funds to this account. These funds can then be used to reimburse them for qualifying expenses such as daycare, babysitting services, or after-school programs.
DCAPs can be standalone benefits or part of a larger “cafeteria plan.” Regardless, they operate under strict IRS rules to ensure proper use of the funds.
What Expenses Qualify for Reimbursement?
To qualify for reimbursement, the expense must be directly related to care that enables the employee (and their spouse, if applicable) to work or look for work. Reimbursement is provided after the care has been rendered.
Eligible Expenses Include:
- Preschool, nursery school, or similar programs (below kindergarten level).
- Before- and after-school care for children.
- Day camps, including specialized camps (e.g., sports, computer).
- Transportation to and from the place of care, if provided by the care provider.
- Employment taxes paid to a caregiver.
- Room and board for a caregiver (in specific cases).
- Application or agency fees related to finding care.
Ineligible Expenses Include:
- Kindergarten tuition or higher education costs.
- Overnight camps.
- Payments made to an employee’s spouse or the child’s other parent (if not their spouse).
Who Qualifies as a Dependent?
Employees can utilize DCAP funds for:
- A dependent child under the age of 13.
- A spouse or dependent who lives with the employee and is physically or mentally unable to care for themselves.
It is important for employees to note that eligibility is calculated on a daily basis. For example, reimbursement cannot be sought for expenses incurred after a dependent’s 13th birthday.
Contribution Limits
Internal Revenue Code Section 129 sets annual contribution limits for DCAPs, ensuring tax compliance:
- Up to $5,000 per year for employees who are single or married filing jointly.
- Up to $2,500 per year for employees who are married filing separately.
These pre-tax contributions are a significant advantage, reducing an employee’s taxable income and thereby increasing their take-home pay. It’s also important for employees to understand that the same expenses cannot be claimed for both a DCAP and the federal dependent care tax credit.
DCAP contributions must be used for eligible care expenses within the coverage period, or they are forfeited. This is often referred to as the “use it or lose it rule.” While a 2.5-month grace period for incurring and submitting claims is permitted, DCAPs do not allow carryovers of unused funds to the next plan year. Additionally, a DCAP is not portable – meaning that if an employee leaves, the funds are forfeited.
Maximizing Benefits for Employees
Offering a DCAP provides meaningful support to employees, whether they are new parents, caring for a loved one with special needs, or simply seeking ways to manage household budgets more effectively. It is a valuable tool that helps team members save money while managing essential care costs.
by admin | Jun 30, 2025 | Custom Content, Employee Benefits
Selecting the right health insurance plans for your family is a critical process that requires careful attention from start to finish. Navigating health insurance becomes much simpler when you understand its terminology. Making sense of these terms empowers you to better understand your costs, benefits, and even estimate the price of a doctor’s visit.
Premium: Your Insurance Payment: The premium is the regular payment you make to an insurance company to maintain your coverage. When you get insurance through your employer, they will specify how much of the premium you are responsible for, and this amount is typically deducted from your paycheck before your taxes are calculated.
Copayment : A copayment, often called a copay, is a specific amount you pay for a covered healthcare service, and it’s usually due when you receive that service. The amount of the copay can be different for different types of care.
Copay Example: For her son’s pediatrician visit for the flu, Heather had a $15 copay that she paid at the time of the appointment.
Deductible: A deductible is the amount you pay for healthcare services each year before your insurance starts covering costs.
Deductible Example: Ashley has a $1,000 annual deductible. Her first arm surgery costs $800. Since she hasn’t met her deductible yet, she pays the full $800.
Coinsurance: Coinsurance is the percentage of the allowed cost for a covered healthcare service that you’re responsible for paying after you’ve paid your deductible.
Coinsurance Example: Ashley’s next surgery costs $3,200 (the allowed amount). She has already paid $800 of the $1,000 deductible so she is responsible for the first $200 of the second surgery. Her insurance has an 80/20 coinsurance split. This means they pay 80% ($2,400), and Ashley pays 20% ($600).
Out-of-Pocket Maximum (OOPM): The OOPM is the maximum amount you’ll pay for covered healthcare costs in a year, not counting your monthly premium. It acts as a financial safety net against very expensive medical care. After you reach your yearly OOPM, your insurance pays 100% of covered costs for the rest of the year. Be aware that some plans have rules about what expenses count towards your OOPM; for instance, some might not include your deductible.
OOPM Example: Ashley has a $3,000 out-of-pocket maximum and has paid $1,600 so far. Her next surgery costs $8,000. She will pay her 20% coinsurance until her total out-of-pocket reaches $3,000. She has $1,400 left to pay. After that, her insurance covers the remaining $6,600.
Preventive Care: Preventive care focuses on staying healthy and catching illnesses early. It includes medical tests, vaccines, screenings, and medications designed to prevent chronic diseases. The goal is to identify and treat health issues in their most manageable stages. Under the Affordable Care Act (ACA), most health insurance plans must cover a range of preventive services without charging copays, deductibles, or coinsurance.
Preventive Care Example: Lori makes an appointment for her yearly check-up and a mammogram with a doctor in her network. Since these are preventive services covered by the ACA, Lori pays nothing – her health insurance covers the full cost.
Other Benefits Terminology
Pre-existing Condition: This is any health issue (physical or mental, including disabilities) you had before your health plan started. Since 2014, most insurers can’t deny coverage or charge more for pre-existing conditions, unless you have a “grandfathered” plan.
Grandfathered Plan: This is a health plan that existed before the ACA (2010) and hasn’t changed much since. These plans don’t have to follow all of the ACA’s rules.
Summary of Benefits and Coverage (SBC): The SBC is a straightforward document that outlines the costs and coverage of a health plan in an easy-to-compare format.
All those healthcare acronyms and terms might seem overwhelming but taking the time to learn them can put you in control. Understanding the lingo makes it easier to pick a health plan that meets your individual needs and budget!
by admin | Jun 10, 2025 | Custom Content, Employee Benefits
The word “cancer” carries a weight that extends far beyond its medical implications. Beyond the physical and emotional toll, a cancer diagnosis can bring significant financial strain. While your primary health insurance will cover many treatment costs, there are often substantial out-of-pocket expenses that can quickly add up. This is where cancer insurance comes in. But what exactly is it, and how does it work?
What is Cancer Insurance?
Cancer insurance is a type of supplemental health insurance policy designed to provide financial assistance specifically if you are diagnosed with cancer. It’s not a substitute for comprehensive health insurance but rather an additional layer of protection to help manage the costs associated with cancer treatment and recovery. These policies typically pay out a lump-sum benefit or provide ongoing payments upon a cancer diagnosis that meets the policy’s definition.
Think of it as a financial safety net tailored to the unique challenges of battling cancer. The funds received from a cancer insurance policy can be used for a variety of expenses that your primary health insurance might not fully cover, such as:
- Deductibles and Coinsurance: Even with good health insurance, you’ll likely have deductibles and coinsurance amounts to pay.
- Lost Income: If you or your caregiver need to take time off work for treatment and recovery, it can lead to a significant loss of income.
- Travel and Accommodation: Traveling to specialized treatment centers can incur substantial costs for transportation, lodging, and meals
- Experimental Treatments: Some cutting-edge or experimental treatments may not be fully covered by standard health insurance.
- Other Living Expenses: The financial burden of cancer can extend to everyday expenses like groceries, utilities, and transportation.
How Does It Work?
- Purchase a Policy: You buy a cancer insurance plan through an insurer, often as an add-on through your employer or directly as an individual.
- Pay Monthly Premiums: Like other insurance policies, you’ll pay a regular premium to maintain coverage.
- Get Diagnosed: If you’re diagnosed with cancer while your policy is active, you file a claim. Cancer insurance will generally only pay benefits for the first occurrence of cancer and will not provide benefits if you have already been diagnosed before purchasing the insurance.
- Receive Benefits: Depending on your policy, you may receive a lump sum or payments for specific treatments and services.
While no one wants to imagine facing cancer, being prepared can make a significant difference. Cancer insurance helps reduce the financial stress of a diagnosis, allowing you to focus more on recovery and less on expenses. However, it’s essential to review your current health coverage and weigh whether supplemental cancer insurance fits your needs and budget.
by admin | Apr 22, 2025 | Custom Content, Employee Benefits
Life sometimes throws you a curveball. You might sprain an ankle playing soccer, need surgery, or experience a difficult pregnancy. These situations can temporarily prevent you from working and earning an income. That’s where short-term disability insurance comes in. It acts as a financial safety net, providing income replacement while you recover and get back on your feet.
What is Short-Term Disability Insurance?
Short-term disability pays you a portion of your salary (usually between 40% and 70%) in situations when non-job-related injuries, illnesses, or other medical issues prevent you from working for a limited time-period. (Note: “Non-job-related” is an important phrase because injuries sustained while you’re on the clock will typically be covered by worker’s compensation vs. short-term disability). It typically provides benefits for a shorter period, ranging from a few weeks to several months, depending on the policy and your situation.
Types of Short-Term Disability Insurance:
- Traditional: Employers pay the full premium
- Contributory: Both employers and employees contribute to the benefit cost
- Core Buy-Up: Employees have the option to purchase more coverage
- Voluntary: Employees alone pay for disability benefits
What to Look for in a Short-Term Disability Policy:
- Premium: The monthly amount you (or your employer) pay for the policy.
- Benefit Amount: How much of your income will be replaced?
- Benefit Period: How long will benefits be paid?
- Elimination Period: How long must you wait before benefits begin?
- Covered Conditions: What illnesses, injuries, and conditions are covered?
- Exclusions: What situations are not covered?
- Cost: How much will the premiums be?
Illnesses or Injuries That Are Not Covered by Short-Term Disability:
- Pre-existing conditions
- Self-inflicted injuries
- Use of drugs (non-prescription) or other illegal substances
- Injury that occurred from doing something illegal
- Cosmetic procedures that are not medically necessary
- Work-related injuries or illnesses
An unexpected illness or injury can happen to anyone. Short-term disability insurance provides a crucial safety net, protecting your financial well-being during a time of need.
by admin | Apr 15, 2025 | Custom Content, Employee Benefits
The Rise of Voluntary Benefits
As healthcare costs increase, so does the demand for voluntary benefits. These optional benefits allow employees to select and pay for additional perks to meet their individual needs, especially in today’s diverse workforce. They’re also a valuable supplement to health insurance, particularly as healthcare expenses rise and affordability becomes a challenge.
Trending Voluntary Benefits
Here are some voluntary benefits that are currently popular or expected to gain traction this year:
- Supplemental Health Insurance: As healthcare costs continue to rise, more employees are looking for ways to manage unexpected expenses like deductibles, copays, coinsurance, and other out-of-pocket costs during accidents, serious illnesses, or hospital stays. Accident, critical illness, and hospital indemnity insurance can help fill these gaps. Unlike major medical insurance, these supplemental plans are not subject to many federal health and benefits regulations, making them a more affordable option. By offering additional coverage, these policies provide employees with peace of mind and financial stability when faced with health challenges.
- Student Loan Repayment Assistance: One in four U.S. adults under 40 have student loan debt, according to the Pew Research Center. Educational assistance programs, traditionally used for expenses like tuition and supplies, can now also cover principal and interest on qualified education loans, with payments made directly to the lender or the employee. This benefit, allowing up to $5,250 in tax-free student loan repayment annually, expires on December 31, 2025.
- Term Life Insurance: Achieving financial security is a priority for many Americans, including being prepared for the loss of a loved one. While 80% of Americans worry about their financial readiness in the event of an unexpected death, nearly 30% still do not have life insurance, according to Guardian. Many organizations offer base-level group term life insurance, partially or fully funded by the employer, with the option for employees to purchase additional coverage. Since employers have already vetted and selected policy options, group life insurance can be an easy choice for employees.
- Cybersecurity and Identity Theft Protection: With increasing cyberattacks, data breaches, and identity theft incidents, employees are more aware of digital risks. Protecting personal and financial information has become a priority. Additionally, the shift to remote and hybrid work environments has introduced new security challenges, as personal devices and home networks are often less secure than corporate systems.
Legal Plans and Services: Legal plan voluntary benefits are highly relevant because employees often require legal assistance for personal matters. These plans alleviate stress, reduce work disruptions, and offer support for various situations, including estate planning, real estate, and traffic issues.
Today’s workforce is diverse, with varying needs and priorities. Employees are no longer content with a one-size-fits-all benefits package. Many workers want benefits that cater to their unique lifestyles, financial situations, and personal goals. Voluntary benefits provide employees with the flexibility to choose the perks that matter most to them, creating a more customized and engaging compensation package.
by admin | Feb 17, 2025 | Custom Content, Employee Benefits
Most organizations treat employee benefits like a seasonal event. Open enrollment brings a flurry of activity – emails, seminars, and even benefits fairs. However, communication often dwindles after this initial push, leaving employees confused and underutilizing their valuable benefits.
This is a missed opportunity. Research shows that employees crave more benefits education, spending hours researching their options. By proactively engaging employees throughout the year, organizations can:
- Improve Employee Understanding: Ongoing communication helps employees retain information and make informed decisions, rather than relying solely on a single, overwhelming open enrollment period.
- Reduce Confusion & Mistakes: Employees often make costly mistakes, such as under-saving for healthcare expenses or failing to utilize valuable benefits like employee assistance programs. Consistent communication can help them avoid these pitfalls.
- Boost Benefits Utilization: Regular reminders encourage employees to actively use their benefits, such as gym memberships, financial counseling, or legal services, leading to improved well-being and reduced stress.
- Enhance Employee Engagement: When employees understand and utilize their benefits, they experience increased job satisfaction, reduced stress levels, and improved overall well-being, leading to higher productivity and retention rates.
- Gain Valuable Insights: Year-round communication allows HR teams to gather valuable data through employee surveys and feedback, enabling them to refine their communication strategies and better address employee needs.
Building a Successful Communication Plan
Two primary approaches can guide your communication strategy:
- Calendar-Based: This traditional approach focuses on pre-determined themes for each quarter or month, aligning with seasonal trends and employee needs. For example, Q1 might focus on retirement planning, Q2 on health and wellness, Q3 on family-related benefits, and Q4 is Open Enrollment season.
- Action-Based: This more modern approach triggers communication-based on employee actions, such as when they file a claim or contribute to their Health Savings Account (HSA). This ensures communication is most relevant when employees are actively engaged with their benefits.
Key Considerations:
- Go Beyond the Booklet: Get creative with your content! Repurpose your open benefits booklet and enrollment presentations into a variety of formats. Utilize diverse communication channels, such as emails, podcasts, newsletters, intranet resources, text messages, and interactive online tools to make information easily accessible.
- Focus on Employee Needs: Tailor your communication to address specific employee concerns and questions, such as how to reduce healthcare costs or plan for retirement.
- Measure and Refine: You can’t manage what you can’t measure. Be sure to track the effectiveness of your communication efforts through surveys, employee feedback, and utilization data. Use these insights to refine your strategy and improve employee engagement.
Benefits education is communicating information about available benefits in ways that employees can connect to and understand. Communicating benefits information year-round is important because employees’ lives – and their situations – are constantly changing. They get married, divorced, adopt a child or have medical challenges arise.
If employees are engaged with their benefits throughout the year, they are more likely to value and use their benefits and will be better informed about their decisions and/or changes they need to make during the next Open Enrollment period!
