A company contribution (also called a contribution scheme) is the amount of money an employer contributes to employees’ monthly health insurance premiums.
If we manage your benefits or you connected your broker, admins can view company contributions right in Gusto.
To view your company contributions:
Go to Benefits.
Scroll down to Active Benefits.
Next to the plan you want to view your contribution for, click Manage.
Next to each employee, you’ll see their deduction and your contribution.
Federal minimum
Employers with fewer than 50 full-time employees are not subject to a federal minimum contribution. If you have 50 or more employees, your company is likely subject to the employer mandate of the Affordable Care Act, known as the employer responsibility provision.
Your insurance carrier's minimum
Most small-group health insurance carriers require a minimum company contribution of 50% for employees. In a few states, some also require a minimum contribution for dependents.
Percentage of any plan
If you offer more than one health plan, you pay the same percentage of whichever plan an employee chooses.
For example, if you offer Bronze, Silver, and Gold plans and set the company contribution to 75% of any plan, you pay 75% of the plan an employee chooses, and they pay the other 25%.
The total company cost will depend on what plan each employee chooses—it’ll be lower for employees who choose Bronze and higher for those who choose Gold.
Percentage of a base plan
If you offer more than one health plan, you can pick a base plan to contribute your percentage to. This means that no matter which plan an employee chooses, you only contribute the set percentage of what their premium would be for the base plan.
For example, if you offer Bronze, Silver, and Gold plans, you could choose Silver as your base plan. This means if you contribute 75% to the Silver plan and an employee enrolls in the higher-cost Gold plan, you only pay 75% of what their Silver premium would be, and they pay the difference. If an employee picks the lower-cost Bronze plan, your contribution covers more of that plan, and the employee pays any remainder.
This is a good way to keep your costs more predictable while offering employees flexibility in their plan choices.
Flat dollar amount
Though less common than percentages, you can also set the company contribution as a flat dollar amount. For example, $300 per employee, no matter what plan they choose. The flat dollar amount still needs to meet your carrier’s contribution minimum.
Offering a different contribution to different employees
Non-discrimination rules require that employers offer benefits equally across a class of employees. For example, some insurance carriers may let you offer one contribution to all full-time employees and a different contribution to all part-time employees. This is called class-based contribution (as the contribution is based on what class an employee is in). Not all companies are eligible to offer this, and not all carriers allow it.
If we manage your benefits or you connected your broker, employees' contributions are deducted from their paychecks each time you run payroll. These funds are left in your company bank account so benefits admins can pay the insurance carrier invoice in full.
If we manage your benefits or you connected your broker, you can change your contribution in Gusto during the health plan's annual renewal before open enrollment starts.
If you offer benefits outside of Gusto and you changed your contribution with the insurance carrier, make sure to change your employees' benefit deductions as needed.