Magazine Publisher Tackles Team Health Insurance
Spectrum Media Group, a publishing and communications business based in Oldsmar, Fla., has been producing ParentGuide® magazine and related publications and events for over eight years. While long-term contractor relationships have kept the business thriving, Spectrum recently noticed an increasing need for health insurance among its contractors. To address this need and maintain the continuity of its valuable team, Spectrum decided to explore options for a company-provided health insurance plan. This had important implications for the business’ growth plans because it signaled that some contractors might become employees – something many of them expressed interest in doing. Spectrum explored the following options:
- High-Deductible Plans with Health Savings Accounts (HSAs): By making long-term contractors full-time employees, Spectrum could offer its team a high-deductible health plan combined with an HSA – a tax-free savings plan designed to offset the cost of health expenses. This combo would allow Spectrum to provide an inexpensive plan to those contractors who became employees, while giving these new staff members the ability to more easily meet the plan’s high deductible by directing tax-free savings into an HSA to cover doctor visits, prescription medications, and other uncovered medical costs.
- Payroll Service: Spectrum reviewed a payroll company that offered insurance benefits as a value-added service. The company would take over all aspects of payroll and payroll taxes for Spectrum, and Spectrum would be able to participate in a number of group health plans. Spectrum would be required to convert contractors to employees and to pay for at least 50 percent of the chosen health plan, with the employee paying the balance. Additional benefits like dental and vision would be optional, and could be paid for by Spectrum or staff members.
- Association Insurance: Spectrum considered joining a business association for a nominal fee each year in order to participate in the association’s health insurance programs. These group plans offered a number of insurance plan options with reasonable buy-in for the employer and the employee. Another option the associations offered was to have contractors buy individual memberships and participate in the health care programs on their own, although the costs were significantly higher when compared with company rates.
Before it could make a decision, Spectrum’s principals had to determine the advantages and disadvantages of converting contractors to employees. They also considered the possibility of maintaining contractor status and increasing compensation to help team members absorb the cost of health plans they selected individually.
After analyzing all options and talking with team members, Spectrum chose to build its business by converting some contractors to employees and pursuing a group health plan through an association. The new employees were asked to contribute 50 percent toward the cost of their new insurance.
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