In discussing the ins and outs of employee benefits one of the most common questions is who is even eligible?
Eligibility guidelines can be different depending upon the type of benefits being considered, for example group vs individual products.
Group Products
Group products are often available for groups as small as two employees for health, life, dental, vision, and disability. Group offerings are typically offered only to full time employees as a way to help attract and retain high quality employees, and are generally considered an important part of an employee’s total compensation package.
Full time is generally defined as those working 30 or more hours per week. Employers can choose to offer benefits to employees working less than 30 hours a week (e.g., 20 hours/week) as long as they apply the guideline consistently to all employees.
Group offerings also generally require funding by the employer of at least 50% of the employee cost of coverage. Employers can fund higher amounts if they choose, which is not uncommon for the lower cost coverages such as group life, dental, vision, and disability.
Individual Coverages
Individual coverages of course don’t have minimum group size requirements, but they can be more restrictive in pricing and underwriting. Employer funding here is also less restrictive and does not require employer minimum contribution levels thus giving employers a lot of latitude. Employers can generally fund as little or as much as they choose.
Whether individual or group coverage, one very important guideline is to always make sure you are offering eligibility in a consistent manner to all employees.