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September 20, 2019
If you want your business to grow, then you need to have the right team in place. In today’s economy, though, business owners have more choice and flexibility when it comes to deciding what having a “team” really means.
Case in point? In today’s workforce, many businesses have grown to rely on the services of independent contractors to supplement or build out their team.
Today’s technology makes it easier than ever before for freelancers and other contractors to work remotely. At the same time, for business owners, bolstering your staff with contractors is a way to maximize your output, while often keeping your expenses low.
In short, rounding out a professional team with independent contractors and freelancers offers cost savings, flexibility, and independence, for businesses and workers alike.
What are some of the practical distinctions between contractors and employees? And what does employing contractors mean when it comes to your small business’s group health plan? Read on . . .
Because of their IRS-determined tax designations, independent contractors are often defined as “self-employed,” and are classified by the form they have to use come tax time: 1099.
As the IRS puts it, payers use the 1099 form to “report payments made in the course of a trade or business to a person who’s not an employee, or to an unincorporated business.” In contrast, full- or part-time employees are often called W2 workers, because of the tax forms that they use. Employers use the W2 form to “report wages, tips, and other compensation paid to an employee,” as well as social security and other taxes withheld.
The distinction between W2 employees and 1099 contractors is important for a number of reasons. For instance, employers generally have more control over the output, working conditions, and schedule of a W2 employee, versus a 1099 contractor. Even more importantly, in many states, regulations say that businesses do not have to afford 1099 contractors the same benefits that they may extend to employees.
However, with that being said, plenty of employers also want to offer benefits to contractors, for any number of reasons—and it’s usually well within their power to do so. As a matter of fact, extending benefits to contractors can come with a number of unique benefits.
Why extend group health benefits to your contractors? The benefits of enrolling your team in group health can be enormous for your business, whether you’re offering the plan to W2 employees, 1099 contractors, or a mix of the two:
In some cases, extending benefits to contractors can offer some unique benefits. For instance, broadening the covered pool for your business may allow everyone to pay lower premiums. In other situations, extending benefits to contractors may make all the difference for your ability to get covered, allowing you to qualify for group health plans when you may not have otherwise been eligible.
Broadly speaking, if your business meets a few key requirements, you will likely be able to extend group health benefits to your contractors. Some of the important things to keep in mind?
It’s important to keep in mind that group health insurance is not cookie cutter. Just as no two businesses and employees are alike, getting coverage for your business may take a different process than it does for the company down the block.
There are a lot of variables in motion. Rules on group health benefits, including who qualifies for enrollment, vary from state to state, and even from insurance company to insurance company. It’s important to take time to determine if you’re eligible for group health benefits, and, if so, which plan out there will be the best match for your unique needs.
Working with a health insurance consultant, like Independent Health Agents is one of the easiest ways to figure out all the details and enroll in the right plan. An expert in all things health insurance, Matt is nationally recognized in the top one percent of healthcare insurance consultants. We have hundreds of satisfied group health clients representing businesses from all over the country.
As Senior Benefits Consultants, we will take time to understand what makes your business unique. From there, we’ll help customize and enroll in the insurance policy that will work for your group, making sure your costs are contained while making a 1 year, 2 year, and 5 year plan.
Ready to take this important step forward for your small business? From understanding what makes your group unique, to figuring out the plans that will best benefit you, there are a lot of factors to keep in mind when it comes to group healthcare. That’s where we step in and help.
We’ll make the process as simple as can be, at every step of the way:
We make enrolling in group health insurance easy, so you and your team can get back to doing what you best, supported by the knowledge that you’re covered by a plan that truly works for you.
We’d be happy to have your join our team of independent agents.
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