Case Studies

A Los Angeles-based printing company grew to nearly 30 employees and wanted to offer traditional group health insurance to attract the best talent. Many of the younger employees wanted a less expensive healthcare option so they could put money into a savings or investment instrument, though the company didn’t want to pay for a 401k plan. Additionally, the company had several regular 1099 contractors they wanted to do something for but didn’t want to fall out of compliance and misclassify their 1099s by offering benefits. For this case, we brought in a High Deductible Health Plan as an option for the younger W-2 employees and set up an HSA with Fidelity, a payroll deducted IRA and Section 125 plan. The younger employees could direct more of their income pretax to the HSA for “just in case”, while it grew in a low-cost stock portfolio tax-free. Additionally, they were able to choose a Roth or traditional IRA and had a percentage of their income payroll deducted into the retirement account. This allowed them to grow both a retirement account and a Health Savings Account designated for later in life as well as a safety net for a possible health event along the way. The business avoided the hassle and expense of a 401k and even realized a FICA savings by using section 125 for the HSA employee contributions. We always recommend though to consult and confirm with an accountant for any financial and tax decisions. For the 1099 contractors, we offered non-worksite group health insurance as they were fairly high earners. This allowed the contractors to be underwritten within the group instead of community-rated in a high-risk zip code in LA. This unique product was a hybrid self-funded plan on an association platform. For both groups we offered employee-paid voluntary dental and 100k of life insurance at no cost to the business.