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Shared Benefits Plan (Now with the HSA Savings Component included!)

The Shared Benefits Plan™ can save you money by reducing your Payroll taxes and Workers' Compensation costs. It will also increase your employees' take-home pay, allowing you to offer one more value-added benefit to your employees.

If your business offers group health and/or life insurance benefits for employees, you are eligible for the Shared Benefits Plan™ (a Section 125 Premium only Plan). This unique employee benefit plan has been offered through Bancover Insurance Services, Inc. since 1990. It conforms with IRS Regulations for Section 125 Premium Only Plans and incorporates the latest HSA requirements.

Today's healthcare market can be uncertain and full of surprises. Navigating your way through it means coming up with creative ways to make the most of your healthcare dollar. We offer a way for you to control the cost of employee benefits and enjoy substantial savings: the Shared Benefits Plan™. The plan reduces payroll taxes on the premium contributions of participating employees, increases their take-home pay and saves the employer Workers' Compensation premiums. The plan saves money by converting premiums from an after-tax expense to a pre-tax expense.

How will Employers benefit?
Employers benefit by reducing the matching Social Security and Medicare taxes, and sometimes Federal and State unemployment taxes. Depending on the state, employers may also be eligible for worker’s compensation savings. Employers generally get tax savings of 7.65% on FICA taxes on employee premium contributions.

How will Employees benefit?
Employees save 22.65% to 40% of their pre-tax Section 125 premium deductions in just federal income taxes alone. The actual tax savings are on city, state, and federal income taxes, including Social Security and Medicare taxes on all money employees use to pay for their portion of insurance premiums. With the Shared Benefit Plan, employees' take-home pay is increased which helps reduce the high cost of providing health coverage for family members.

Who Can Participate in the Shared Benefits Plan?
Employees of regular corporations, S corporations, limited liability companies (LLCs), partnerships, sole proprietors, professional corporations, and not-for-profits can all reduce payroll taxes by establishing a Section 125 Premium Only Plan. Not eligible are sole proprietors, LLC members (in most cases), partners, or individuals owning more than 2% of an S corporation. But as employers, they can save themselves payroll taxes (7.65%) by sponsoring the Shared Benefits Plan for their employees.

When Is The Best Time To Start a Shared Benefits Plan?
It can be started any time during the year. The best time to establish the plan is at your group health insurance plan renewal. Because most groups receive rate increases at renewal this is the ideal time to allow employees to sign a Shared Benefits Plan form prior to the new Plan Year. It is also quite acceptable to start a new short Plan Year anytime. Say it's April, and you prefer a calendar Plan Year from January 1 to December 31. You can start a Short Plan Year, say on June1 and end the first Short Plan Year on December 31. After December 31 your Section 125 Plan will be on a calendar year from January through December.

What About Existing Section 125 Plans Already In Place That Need To Be Updated?
If you already have a Plan you started years ago, you can amend and restate the Plan anytime. The Shared Benefits Plan is continuously updated and we notify clients of relevant changes. It's not unusual for a group to misplace a Plan Document and need to replace it. This is a good time to update the old plan with current plan documents. Give us a call and we'll help you.