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How Group ‘Gap’ Insurance Can Save Your Staff From Financial Hardship

If you are offering high-deductible health plans to your staff to reduce overall premium outlays, you know that this type of insurance has one major drawback: higher out-of-pocket expenses that some may struggle to afford if they experience a sudden illness or accident.

Fortunately, you can offer a product that can help them cope with unexpected out-of-pocket costs for their health care: gap insurance, otherwise known as supplemental medical expense coverage. Supplemental insurance is an extra layer of coverage designed to help with expenses primary health insurance may not fully cover, including copays, coinsurance, deductibles and even living expenses.

With more Americans going into serious debt due to medical expenses, supplemental insurance can provide a financial lifeline when someone needs it most.

Group supplemental insurance is a voluntary benefit that is usually less expensive than if someone purchases it on their own. There is typically no underwriting or health exams for group policies, which is not always the case with individual policies.

This voluntary benefit can be structured in different ways, but they usually cover deductibles, copays, coinsurance costs, prescription drug costs and other health care-related expenses.

Gap insurance may also cover nonmedical expenses, including living expenses during a hospital stay or while recovering at home from an illness or accident. Other gap plans might include income replacement for periods when individuals can’t work due to an illness, accident or after a medical procedure.

Types of gap insurance

There are a few types of gap insurance, each covering something a bit different:

Hospital indemnity insurance — This can help cover the costs associated with a hospital stay, including the cost of childcare or if a patient needs to travel far from home to receive medical care. Depending on the plan, hospital indemnity insurance gives you cash payments to help pay for added expenses that may come while you recover. Typically, plans pay based on the number of days of hospitalization.

Critical illness insurance — This provides a benefit if a policyholder becomes very ill or suffers a serious medical problem, like a heart attack or stroke. This plan supplements existing health insurance coverage with extra funds when a policyholder incurs extra expenses due to an illness and when they can’t work. They may receive a lump sum to cover these added expenses or monthly payments depending on the plan.

Accident insurance — This can help the policyholder cover medical costs or living expenses if the policyholder is injured in an accident. Policies pay out a preset number of times over a specific time or in a lump sum.

Cancer insurance — This can cover radiation, chemotherapy, immunotherapy, surgery, hospitalization and possibly screening benefits — all related to a cancer diagnosis and treatment. It can pay out in different ways:

Expense incurred policy, which pays a specific percentage of treatment costs up to a set limit.
Indemnity policy, which covers expenses for approved treatments up to a predefined limit.
Lump-sum policy, which pays a fixed amount after a cancer diagnosis.

Benefit to employees

The cost of gap coverage is reasonable, ranging from $10 to $50 a month depending on the coverage. Employers can offer to pay all or part of the premium.

If you offer HDHPs to your staff, supplemental insurance can help your employees weather a serious illness or accident by providing much-needed funds to help them get buy during a difficult period.

Why Employers Should Promote Checkups to Control Group Health Insurance Costs

One often-overlooked factor that can drive up group health plan premiums is employee health behavior, particularly the tendency to skip preventive care visits.

According to Aflac’s most recent “Wellness Matters Survey,” 94% of Americans have delayed or skipped checkups and screenings that could detect serious illnesses early. When employees avoid the doctor until a major health issue emerges, the resulting claims can be far more costly — both in terms of medical expenses and lost productivity.

For employers, this can lead to higher utilization and claims down the road, ultimately pushing up premiums at renewal time.

Why people skip appointments

Checkups and screenings can help detect chronic conditions like hypertension, diabetes and certain cancers early, when they’re easier and less expensive to treat.

Yet many workers don’t act until a health scare forces the issue. The Aflac survey found that nearly two-thirds of Americans only became proactive about their health after a major incident. Barriers like distrust of doctors, fear of bad news, scheduling hassles and uncertainty about insurance coverage keep many from seeing their primary care physician.

The study sheds light on the myriad reasons so many people are skipping routine checkups and screenings:

37% have canceled or not scheduled a doctor appointment because the wait was too long.
48% of those surveyed say they refrain from regular checkups because of logistical issues (such as difficulty finding a babysitter, taking time off from work or finding transportation).
26% say they do not trust doctors or would rather not be embarrassed.
14%, including 18% of Gen Z workers, say insurance issues keep them from getting checkups and screenings.
41% — primarily Gen Z (51%) and millennials (54%) — rely mainly on urgent care or the emergency room for their medical needs.
62% of those who believe they will be diagnosed with cancer are more likely to delay screenings.

What employers can do

One of the more striking findings was that 87% of those surveyed said they would be more likely to attend routine checkups and screenings if they received a cash incentive to do so.

Employers have a unique opportunity to promote preventive care and reduce friction that stops employees from making appointments.

Practical steps employers can take

Encourage your staff to book annual checkups at a specific time each year and put it on their calendar. The study found that those who book appointments at a specific time of year are twice as likely to complete recommended doctor visits and screenings.
Promote preventive care. Use company newsletters, e-mail, intranet posts or Slack messages to remind employees about the importance of annual physicals and screenings.
Urge employees to get a primary care physician if they don’t already have one. Patients who have a primary care doctor are more likely to attend checkups and receive reminders from their doctor. The survey found that one in five did not have a primary care physician.
Advise employees to get their families involved in health for everyone. Seven in 10 said that a loved one’s urging would make them more likely to go to the doctor.
Host an “Annual Checkup Day.” Block off a “no meetings” hour across the company and encourage employees to use the time to schedule their appointment or even take a walk, meditate or engage in another wellness activity.
Offer incentives for scheduling checkups. Small rewards like gift cards or company swag can go a long way.
Protect paid time off. Reassure employees that they won’t have to take paid time off to attend a medical appointment.
Educate employees about coverage. Make sure employees know which screenings are covered under their plan.

SMEs Prioritize Group Health, But Some Make Financial Tradeoffs: Survey

A new poll has found that most small and mid-sized enterprises consider offering group health insurance benefits to their staff a fundamental business value, despite many firms making difficult financial tradeoffs to maintain that coverage.

It’s been well-reported that SMEs are disproportionally burdened by rising health insurance costs and a labor market that demands robust benefits. A study by Morgan Health, a unit of JP Morgan, found that one-third of SMEs drop their health insurance each year, but the ones that stay the course must be nimble and sometimes make choices that allow them to continue offering health insurance.

The goal of the survey was to better understand how businesses make tradeoffs to keep health care coverage in place and areas where they need additional support or innovation.

Here’s a look at how most SME operators view their role in group health benefits, the challenges they face and steps they are taking to provide benefits and improve their offers.

Firms, staff value health coverage

Most SMEs polled said they consider group health insurance a fundamental part of their benefits package to stay competitive in the job market.

The challenge facing these firms is balancing the cost of group health insurance against the financial benefits of attracting the best and brightest. SMEs often struggle to match the expansive benefits choices of larger employers who usually have more resources to offer wellness programs, mental health benefits and virtual care.

As a result, SMEs will often prioritize their employees’ well-being and happiness as part of a family-like company culture to set themselves apart from larger employers. This focus can positively affect employee satisfaction and business performance, even if that means absorbing other costs.

Financial tradeoffs

A separate report by JPMorganChase Institute found that one out of three small businesses discontinue paying health insurance premiums from one year to the next. However, many executives polled by Morgan Health said that prospect would be the absolute last option.

One executive of a firm with between 100 and 500 employees told the surveyors, “There would have to be a lot of cuts made in our budget before we would [discontinue benefits] … I think that would be one of the last things on the chopping block.”

Dropping coverage is only an option for firms with fewer than 50 full-time and full-time equivalent employees. Employers with 50 or more of these workers are required under the Affordable Care Act to offer group health insurance to their staff that is affordable and covers essential services.

Employers may take other steps like:

Reducing family plan contributions (not always popular).
Shifting to a high-deductible health plan, which in turn lowers the premium. On the flipside, your employees will have higher maximum out-of-pocket expenses. This can include promoting health savings accounts, which allow employees to save for future medical expenses with pre-tax dollars. HSAs can only be tied to an HDHP.
Choosing a plan that doesn’t cover doctor office visits or prescription drugs until the deductible is met.
Selecting a carrier with lower rates even though you may sacrifice network availability.
Offering an individual coverage health reimbursement arrangement. These are basically accounts that the employer funds to allow their staff to purchase health insurance in the private market or on an ACA marketplace.

The takeaway

A word of warning: Making big changes to save money can result in unintended consequences. As a result, considering a big change requires research, which takes time and money. Large employers will usually have a dedicated human resources team that can do the research, but SMEs, not as much.

We can help you evaluate your options, stay competitive in the talent market and retain key personnel. As your strategic partner, we can work with you to manage your health insurance costs and explore new options as the market continues to evolve.

HDHP Enrollment Slipping: What It Means for Employers

For years, high-deductible health plans have been the most common type of health insurance that employers offer.

HDHPs surged in popularity between 2013 and 2021, peaking at 55.7% enrollment. But in a sharp reversal, enrollment in these plans has now fallen for two consecutive years, dipping to 49.7% in 2023, according to the latest data from ValuePenguin.

The drop in enrollment could reflect a turning point for employees who are increasingly concerned about rising out-of-pocket health care costs and the prospect of not being able to afford a medical emergency.

How HDHPs work — and their drawbacks

An HDHP typically features lower monthly premiums in exchange for a higher annual deductible. These plans are often paired with HSAs, which let workers save pretax dollars to use for qualified medical expenses.

While appealing due to their low premiums, HDHPs can become a financial burden for employees who need more than routine care. A medical emergency, unexpected illness or ongoing treatment for chronic conditions can lead to steep out-of-pocket costs.

In fact, surveys show that nearly three-fourths of Americans worry about affording unplanned medical expenses. As a result, employees are now scrutinizing their options more closely and looking for plans that balance cost, predictability and comprehensive coverage.

Why enrollment is falling

Several factors are contributing to the recent decline in HDHP popularity, according to ValuePenguin:

Rising deductibles: Even as premiums stay relatively low, the cost burden has shifted to higher deductibles. This trade-off is less tolerable for employees who feel they might need care.
More plan choices: Around 61% of workers now have access to multiple health plan options. With more choices, many are opting for plans with lower out-of-pocket costs, like PPOs, HMOs or point-of-service plans.
Shift away from HDHP-only offerings: The number of employers offering only HDHPs has dropped by 33% since its peak in 2020. That shift is reflected in the enrollment decline.

The rise of POS plans

As HDHP enrollment falls, POS plans are quietly gaining ground — especially among small businesses. These plans combine elements of HMOs and PPOs, offering moderate flexibility at a midrange cost.

Employees typically choose a primary-care doctor and need referrals for specialists, similar to an HMO. However, they also retain some out-of-network coverage like a PPO, although usually at a higher cost.

From 2018 to 2023, POS plan enrollment grew from 6% to 10%, reflecting growing interest in plans that offer a balance between cost and flexibility.

For small employers, POS plans can be a strategic middle ground — less expensive than PPOs but more comprehensive than HDHPs. As more employees seek plans that reduce uncertainty without ballooning premiums, POS offerings may continue their steady rise.

When HDHPs still make sense

Despite the downturn, HDHPs aren’t vanishing, and they are still a good choice for certain groups:

Young and healthy workers: People who rarely use medical services can benefit from the low premiums and use HSAs to build tax-free savings.
High earners with savings: Employees who can pay upfront costs without financial strain may find HDHPs cost-effective, especially when negotiating reduced provider rates.
Those committed to using HSAs: For individuals actively contributing to and spending from HSAs, HDHPs can offer both immediate tax benefits and long-term savings growth.

In some states — notably South Dakota, South Carolina and Utah — HDHP enrollment remains high, even increasing sharply in 2023.

Key takeaways

As the health benefits landscape shifts, here’s what employers should keep in mind:

Diversify plan offerings. Employees want options. Offering more than just HDHPs helps meet a wider range of needs and mitigates risk for workers with varying financial situations.
Educate your workforce. Most employees, especially younger generations, report confusion about health benefits. Provide ongoing education to help workers make smarter decisions about coverage.
Monitor enrollment trends. While HDHPs are declining overall, regional and demographic factors still matter. Tailor offerings to the specific needs of your workforce and location.

What You Need to Know About the EEOC’s New DEI Guidance

The Equal Employment Opportunity Commission, together with the Department of Justice, recently issued new guidance that significantly reshapes the legal landscape for workplace diversity, equity and inclusion programs.

This comes on the heels of a series of executive orders issued by President Trump that direct federal agencies to eliminate what the administration characterizes as “illegal DEI” practices.

For employers — especially those with formal DEI programs — this development creates new legal exposure, murky compliance territory and growing uncertainty around what is now permissible. Below is a practical breakdown of what’s changed, what remains unclear and what senior leadership should consider doing now.

On March 19, 2025, the EEOC and DOJ issued two technical assistance documents meant to clarify how Title VII of the Civil Rights Act applies to DEI programs. While the documents reflect long-standing principles of anti-discrimination law, they also take a narrower view of what DEI initiatives are legally permissible.

Importantly, these documents are informal guidance and not legally binding, but they reflect how the agencies intend to interpret and enforce the law under the current administration.

The guidance

The EEOC’s guidance reaffirms that Title VII prohibits employment decisions based — in whole or in part — on protected characteristics such as race, sex, religion or national origin. The guidance also emphasizes that protections apply equally to majority and minority groups.

The agency said DEI policies, programs or practices may be unlawful under Title VII if they involve “an employment action motivated — in whole or in part — by an employee’s race, sex, or another protected characteristic.”

Based on various legal interpretations of the guidance, some of the most significant changes include:

No exceptions for diversity goals — The EEOC states in its guidance that there is no “diversity interest” exception under Title VII. Even if a DEI program is aimed at increasing representation or equity, it cannot involve employment actions motivated by race, sex or other protected characteristics.

Affinity and resource group access must be open to all — Employers cannot restrict participation in affinity groups based on race, sex or similar traits. Limiting access — even with the goal of creating safe spaces or support systems — may now violate Title VII.

Segregation in training and development is risky — Organizing DEI training or programs that separate participants by race, gender or other protected categories is likely unlawful.

Quotas and workforce balancing remain unlawful — The EEOC reiterated that hiring or promotion quotas, or any form of “balancing” the workforce based on demographic traits, is discriminatory under Title VII.

No such thing as “reverse discrimination” — The EEOC emphasized that Title VII protects all employees, regardless of group status. It does not require a higher burden of proof for claims from majority-group employees.

Hostile work environment claims from DEI training — DEI training that is viewed as offensive or discriminatory by employees could give rise to hostile work environment claims. This includes situations where training materials stereotype or marginalize employees based on race or gender.

Retaliation protections apply — Employees who object to perceived unlawful DEI practices, participate in investigations or file EEOC charges are protected from retaliation under Title VII.

While the guidance outlines several potentially unlawful DEI practices, it does not provide a definitive list of what is permissible. This ambiguity puts employers in a difficult position because the line between compliant and noncompliant practices is often hard to draw.

Steps to take

Given the legal uncertainty and heightened scrutiny, the law firm of Fisher Phillips recommends that companies consider the following actions:

Engage legal counsel to review DEI-related policies, training materials and communications. Focus on areas such as hiring, promotion, compensation, training, mentorship, internships and affinity group policies.
Shift from targeted DEI initiatives based on protected characteristics to programs that promote skill-building, access and inclusion for all employees. Emphasize transparent, merit-based advancement and development opportunities.
Where possible, position DEI efforts to emphasize workplace culture, professional development and inclusive merit-based access to opportunities.
Update your training to reflect the latest EEOC guidance. Ensure that decision-makers understand that DEI efforts cannot involve preferences or separate treatment based on protected traits.

Bottom line

The new guidance is a major shift in how the EEOC will approach regulating workplace discrimination. For employers, this means a narrower path for legally compliant programs and greater exposure to discrimination claims from any employee group.

If you have a workplace DEI program, it’s imperative that you revisit it and adjust it accordingly.

The GLP-1 Dilemma: How Employers Can Take Control

Many employers are facing challenges in incorporating high-cost GLP-1 medications, such as Mounjaro, Ozempic, Rybelsus, Trulicity and Wegovy, into their group health plans, as they must balance the cost of the group health plan against the interests of participants and beneficiaries in the treatment.

With prescriptions for these drugs cost around $1,000 a month, outlays for these drugs could eat up all the premiums paid for health insurance for an individual. While most health plans will cover these drugs for individuals who have diabetes and obesity, employers have been loath to cover them for employees who just want to lose weight due to the immense costs.

Despite that, employer spending on GLP-1s solely for obesity jumped nearly 300% between 2021 and 2023. And with demand continuing to increase, many employers are looking for ways to accommodate coverage for weight loss without breaking the bank. Here’s what some of them are doing:

Taking a holistic approach — One of the major drawbacks when taking a GLP-1 to lose weight is that once a patient stops taking injections, they often gain the weight back and any improvements in their blood pressure, blood sugar levels and cholesterol may disappear.

This is why more employers who are covering GLP-1s for weight loss are also requiring the employees to take part in holistic weight-management or lifestyle programs, like a dedicated exercise regimen and adopting a healthy and sensible diet. These lifestyle choices not only enhance the medication’s efficacy, but also support weight management, nutrient absorption, muscle preservation and overall health.

With this approach, patients have a better chance of maintaining their weight loss if they stop taking the drug.

Set conditions — Experts recommend setting certain conditions to qualify for a GLP-1 prescription solely for weight loss. This may include requiring that they have a body mass index of 33 or higher (anything over 30 is considered obese) along with one comorbidity like:

High blood pressure,
Chronic obstructive pulmonary disease,
Diabetes,
Heart disease, or
Respiratory disease.

Setting a lifetime limit — Some employers and health plans cap the amount that they spend on a GLP-1 for patients who want to lose weight. Some set an expense limit like $10,000 or $20,000, while others have a time limit, such as two years.

Higher copays and deductibles — Another strategy is setting a higher copay for GLP-1s. Also, since these drugs are not included on the ACA preventive service list, plans may introduce a deductible for this category of prescription drugs, provided that GLP-1 coverage is not required for preventive diabetes services.

Remove Ozempic from formulary — Ozempic is by far the most popular of the GLP-1s thanks to media hype and word-of-mouth recommendations. This brand-name recognition has helped drive utilization up 75% between 2022 and 2023, according to the “IQVIA 2023 National Sales Perspectives” report.

Employers can ask their health plans to have their pharmacy benefit manager remove Ozempic from their list of covered drugs and opt for another GLP-1 like the lesser-known Trulicity, the utilization of which grew just 25% between 2022 and 2023.

Making a coverage change to a less utilized GLP-1 can reduce utilization, while preserving options for members with diabetes who need GLP-1s to remain healthy.

Have an alternate solution — Another option is to cover bariatric surgery, which yields better results. It typically costs between $10,000 to $15,000 — about the same as one year of most GLP-1 prescriptions. Most people who undergo this type of surgery have a much higher success rate of keeping weight off.

For example, the success rate of keeping weight off after bariatric surgery is 90%, according to the Cleveland Clinic. After this surgery, many patients steadily lose weight during the first two years after the surgery, after which the typical patient regains less than 25% of their weight. Most people who stop taking GLP-1s after losing weight cannot expect similar success in keeping their lost weight off.

Step therapy — Step therapy or fail-first programs are a medical management technique that requires the use of generally less expensive treatments before allowing coverage of higher-risk, higher-cost treatment options.

The takeaway

Currently, self-funded and fully insured group health plans are not required to cover GLP-1s for any purpose. However, because GLP-1s are a common form of treatment for diabetes, it may be difficult to exclude all GLP-1 coverage.

If a plan sponsor intends to provide GLP-1 coverage for weight loss, it may want to consider implementing medical management techniques to reduce claims exposure associated with GLP-1 coverage.

Cyber Criminals Target HSAs: Warn Your Employees

Health savings accounts have become a prime target for cyber criminals, who are using advanced tactics to steal funds from them, putting your employees’ medical expense savings at risk.

The risk is even greater considering that employees can keep HSAs for life and many of them are building wealth in these accounts to save for future medical costs in their retirement years.

As the popularity and value of HSAs grows, employers are in a unique position to train their workers on how to best protect their accounts from cyberattacks that can drain their hard-earned medical expense savings.

Criminals see HSAs as ripe for plundering

HSAs have surged in popularity in recent years, with assets growing by 18% between mid-2023 and mid-2024 alone. There are an estimated 38 million HSA accounts in the U.S. with a combined $137 billion in funds, according to investment research firm Devenir.

Thanks to the portability of these accounts and the ability to invest them in investment funds — much like 401(k) plans — some HSAs hold large balances. That makes them especially appealing to cyber criminals.

While HSA providers have invested heavily in cyber security, threats continue to evolve because cyber attackers aren’t always breaching the providers directly. Sometimes, they gain access through third party vendors or by leveraging personal information leaked in unrelated breaches.

For example, HSA provider HealthEquity reported that attackers gained access to one of its business partner’s accounts in 2024, potentially compromising the personal data of more than 4 million account holders.

Criminals may also send scam e-mails which direct account holders to bogus sites that steal their account username and password.

Once attackers have access to personal information, they may bypass security measures through phishing e-mails, social engineering tactics or brute-force password attacks. In some cases, they exploit weak or reused passwords and intercept sensitive communications.

Employers can help

Given how deeply integrated HSAs are into employee benefits, employers can help by providing training that teaches their staff how to protect their HSA accounts and recognize phishing attempts or social engineering scams.

Cyber-security education doesn’t have to be complex. Even short, focused sessions on topics like password hygiene, spotting suspicious e-mails and using multi-factor authentication can make a significant difference.

Here are some steps every HSA holder should take:

Monitor account alerts and e-mails: Always check for e-mails or notifications about changes to your account, like updated contact info or security settings. If something looks unfamiliar, report it to your HSA provider immediately.
Review account transactions regularly: Just like with a bank or credit card statement, it’s important to review your HSA transactions to ensure all activity is legitimate. Most providers allow users to freeze their benefits card if they suspect fraud.
Use strong, unique passwords: Never reuse passwords across accounts, and consider using a password manager to create and store complex, randomized passwords. The longer and more unique the password, the better.
Enable multi-factor authentication: Many providers are expanding MFA options to add an extra layer of security. This can include verification codes sent via text or e-mail, or biometric verification.

Key Employee Insurance Protects the Future of your Business

You have a great group of employees working with you and your business is thriving. For many small-to-mid-sized businesses that success is due to key employee with both skills, experience and connections that would be difficult to replace.

But what if one of your personnel were injured and out of work for a while, or even worse, suppose they died unexpectedly? Would your business survive without this key person’s involvement in your operations?

If this were to happen, you’d likely immediately have to find and train a replacement, but getting the right person for the job would require a substantial amount of training and building on-the-job knowledge. During this transitional time, you could face losing business if you are unable to fulfill all of your orders or contractual obligations or if delivery time starts slowing.

Fortunately, there are two products that would provide your organization with additional funds to weather this uncertain time: key person life insurance and key person disability insurance.

Key person life insurance

Generally, your business purchases a life insurance policy on a key employee, pays the premiums and is the beneficiary in the event of the employee’s death. As the owner of the policy, the business may surrender it, borrow against it and use either the cash value or death benefits as the business sees fit.

However, coming up with a dollar value on a key employee’s economic worth can be challenging.

There are no specific rules or formulas to follow, but there are several guidelines that can help.

The appropriate level of coverage might be the cost of recruiting and training an adequate replacement.
Or, the insurance amount might be the key employee’s annual salary times the number of years a newly hired replacement might take to reach a similar skill level.
Finally, you might consider the key employee’s value in terms of company profits. The level of insurance coverage might then be tied to any anticipated profit or loss.

Premiums for key employee life insurance are not a tax-deductible business expense for federal income tax purposes, since your business is the recipient of the benefits. For the most part, the death benefits your company receives as the beneficiary of the policy are not considered taxable income.

However, if your business is a C corporation, the death benefits may increase the corporation’s liability for the alternative minimum tax. You should consult a tax professional for information on your specific circumstances.

Key employee disability insurance

The death of a key employee isn’t the only threat to your business. What if a key employee is injured or becomes ill and is out of work for an extended period of time? Disability insurance on such a key employee is another way you can protect your business against any resultant financial loss.

A crucial part of key employee disability insurance policies is the definition of disability.

Typically, these policies define disability as the inability of the employee to perform his or her normal job duties due to injury or illness. As with life insurance, your business buys a disability insurance policy on the employee, pays the premiums, and is named as the beneficiary.

If the employee becomes disabled, the insurance coverage pays monthly disability benefits to your business. These benefits can equal a certain percentage of the key employee’s monthly salary, up to either a maximum monthly limit or 100% of their salary.

The benefits may be used to pay the operating expenses of the business and to cover the expense of finding a temporary or permanent replacement for the key employee.

The disability policies typically offer elimination periods (i.e. the waiting period between the disability and when the benefits begin) ranging from 30 to 365 days.

Depending on the policy, your business may receive benefits for 6 to 18 months, which would be long enough to allow the key employee to return to work or for the company to replace the key employee.

Depending on the type of coverage purchased, the premiums you pay for the key employee disability policy may or may not be a tax-deductible business expense. If the policy is considered business overhead expense insurance, then the premiums are a deductible expense.

While the business would be responsible for paying taxes on any disability benefits received, the business expenses the policy indirectly pays for would result in an offsetting deduction.

The takeaway

Planning ahead can help secure your company’s financial future. Key employee insurance can help assure families, employees, creditors, suppliers and customers that the future of the business is secure.

By purchasing life and disability insurance on the owner(s) and/or key employees, you can are ensuring peace of mind in the event that a tragedy should befall one of your most important personnel.

How to Deal with ICHRA Administration

Employers that have decided to offer their staff individual healthcare reimbursement accounts to purchase health insurance on their own have been encountering administrative headaches.

Simply tracking whether workers in an ICHRA plan have secured coverage can be complicated, but employers need to contend with other compliance issues too. As a result, more firms have turned to third party plan administrators or insurers to simplify enrollment for ICHRAs, which adds to the costs of administering these plans.

ICHRAs are still foreign to most employers and their workers. They became a viable option for funding health insurance for employees in 2020. Since then, they have grown in popularity as they provide another option for businesses to help fund employees’ coverage. Younger and healthier workers have been most responsive to these plans, as the arrangements provide a way for them to secure low-cost coverage on their own.

Employers can contribute a specific amount to an ICHRA each year or each month. Participating employees must use those funds to purchase individual health insurance coverage on an Affordable Care Act marketplace or in the open market.

Employers can offer an ICHRA as a stand-alone benefit or alongside a group health insurance policy. For example, an employer could offer group coverage to full-time employees and an ICHRA to part-time employees.

However, employers who offer ICHRAs may face various administrative challenges:

Documentation —Employers are required to comply with IRS reporting rules, just as they would if they provide health insurance.
Reimbursements —Employers must track reimbursements and verify that participating employees secure and maintain their coverage.
Compliance—ICHRAs must comport with IRS, Department of Labor, ERISA and COBRA regulations.
Employee understanding —Employees may be unfamiliar with ICHRAs and need help understanding eligibility and benefits. This requires additional training as well as one-on-one meetings.
Setup—Employers must navigate setup requirements, determine administrative methods and educate employees.

Other considerations for employers include:

Loss of premium tax credits —Employees eligible for affordable ICHRA coverage lose access to ACA premium tax credits, which reduce their premium on exchanges, resulting in higher costs for them. They lose this credit even if they decline the benefit.

Coverage and family limitations—ICHRA funds cannot be applied to spousal group plans. As a result, family members need to secure coverage from another source, like a group plan for the other parent, or purchasing a plan on the ACA marketplace.

Employee backlash —Since these are still relatively new products, forcing workers to shop for health coverage on their own could create resentment in the ranks.

What employers can do

One benefit of these plans is that they often pull young, healthy workers back into the risk pool. However, older staff with health conditions that increase health plan usage are not likely to go for an ICHRA. Likewise, staff with families needing coverage are likely to balk at the option.

Employers considering offering employees ICHRAs and looking to reduce administrative and other burdens may want to hire a third party administrator specializing in ICHRAs.

Some of these administrators function as a bridge between employers and health insurance companies, facilitating the enrollment process for employees choosing individual health plans. Administrators can manage communication, ensure compliance and streamline the selection of plans available through different insurers.

Companies who prefer not to outsource these functions can:

Use software tools to streamline processes.
Train personnel to manage reimbursements and compliance.
Provide clear communication and training to employees.
Offer support to help employees navigate eligibility requirements.
Work with us to stay up to date on compliance requirements.
Use detailed consolidated invoicing to simplify the billing process.

Executive Order on IVF: What HR Leaders Need to Know

President Donald Trump, while campaigning, promised his administration would ensure invitro fertilization treatments were either covered by insurance or directly paid for.

However, his recent executive order, issued on Feb. 18, stops short of outlining specific policies to accomplish this. Human resources executives are taking a wait-and-see approach to the order, as it directs the assistant to the president for domestic policy to within 90 days.

IVF is a costly procedure, with a single cycle typically ranging from $15,000 to $20,000.

While some employers — primarily large corporations — have expanded fertility benefits, many workers still lack access.

More than 20 states have laws requiring certain health plans to cover some fertility treatments, but these mandates exclude self-funded employer plans, which cover 61% of insured workers.

As a result, only a small percentage of employees benefit from these requirements. Some large employers have turned to third party fertility benefit providers, which operate outside traditional health plans, to offer IVF coverage.

Actions taken at the legislative level

According to legal experts, Congress would have to pass legislation to mandate broader health insurance coverage for IVF.

Recent legislative efforts have stalled. In 2023, the Right to IVF Act was introduced after the Alabama Supreme Court ruled embryos should be considered children, a decision that temporarily disrupted IVF access.

The bill, which aimed to protect IVF access, was blocked in Congress. Another bill, the bipartisan HOPE with Fertility Services Act, sought to amend the Employee Retirement Income Security Act to require insurers to cover infertility treatments, including IVF, but it died in a House of Representatives committee in 2024.

What HR leaders should watch

While this executive order signals a federal focus on IVF access, it does not provide immediate solutions. Employers should monitor policy recommendations expected within 90 days and potential legislative efforts that could mandate insurance coverage.

Still, there are a few points to consider for employers:

Cost management — The order’s emphasis on reducing out-of-pocket and health plan costs for IVF treatments may require employers to review and potentially adjust their health plans to comply with new regulations or recommendations that emerge from this order. This could involve negotiating with insurance providers to cover IVF treatments more comprehensively.
Cost reduction — The order calls for a reduction in the costs of IVF and employees’ out-of-pocket costs. Reallocating cost away from an employee’s out-of-pocket expenses to the health plan would make the entire employer health plan more expensive.
Regulatory compliance — Businesses will need to stay informed about any new policies or regulations that arise from this order. Ensuring compliance with these changes will be crucial to avoiding legal issues.
Recruiting and retention — Enhancing access to IVF treatments could be a significant benefit for employees, potentially improving employee satisfaction and retention. Corporations might consider promoting these benefits to attract and retain talent.

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