When your employees evaluate your workplace benefits, they aren’t just thinking about themselves. They also care about how the plan will cover their dependents. And dependent health insurance isn’t just a concern for employees with children.
Some employees might be planning families in the near future, while more than 1 in 6 Americans report taking care of an elderly or disabled family member, relative or friend, according to the Family Caregiver Alliance.
Your current health insurance plan could include several benefits for taking care of dependents. Teaching your employees how to take advantage of them will help them both keep their families healthy and keep them satisfied with your benefits offerings.
Dependent Care FSAs
A dependent care flexible spending account (DCFSA) allows employees to use pretax money to provide care for children under the age of 13 as well as adult family members who need daily care support.
Employees can contribute up to $5,000 a year to these accounts with money out of their paycheck. They can then use this money to pay for eligible expenses like babysitting while they’re at work, day care, summer camps, adult day care and other elder care services that support the dependent when your employee can’t be there.
Dependent Health Insurance Benefits
Your health insurance plan may have extra benefits your employees and their dependents aren’t taking advantage of. Check to see whether your plan offers telemedicine, for example, which allows people to contact a medical professional remotely by phone or online video. This could come in handy when an employee or their dependent can’t visit their regular doctor, such as when an employee’s child is away at college.
Though the Affordable Care Act (ACA) made mental health services a minimum essential benefit in small business plans, this care is underused, especially for children. It’s not enough to see just the regular doctor, as only 1 out of 3 pediatricians report they have the training to diagnose and treat mental disorders in children, according to the Centers for Disease Control and Prevention. Encourage your employees and their dependents to use the mental health care services you offer.
Dental and Vision Insurance
If you offer dental or vision insurance, this coverage can also be extended to dependents. Check with your insurance company to see how coverage would work — at what age the plan stops covering children, for example, or the maximum amount the family can spend altogether per year.
Workers with young children might value dental and vision coverage almost as much as primary health insurance, considering the importance of this care for kids as they grow up.
Health savings accounts — or HSAs — are another way for employees to support dependents. Employees can contribute pretax money to this account and spend on health care expenses for themselves and dependents. For the employee to spend their HSA funds on another adult, that person must be a tax dependent.
Employees can use this money to pay for qualified health care expenses like deductibles, premiums, copayments, prescriptions and medical supplies for themselves and their dependents.
Designing Coverage for Dependents
Under the ACA, if you offer health insurance to employees, you must offer coverage to their dependent children up to age 26, too. But you don’t need to cover their spouses or other dependent family members. It’s possible to design the plan so that if employees want to cover dependents, they have to pay for it themselves. For benefits like dental or vision care, there is no requirement to cover dependents.
As you decide what and whom to cover, though, consider the recruiting value of improving benefits for dependents. According to the Harvard Business Review, workers rate better health, vision and dental insurance as the most important benefit. Extending insurance for dependents is a smart way to make your plan more valuable in the eyes of your current and potential employees, which can help with retention and hiring.
When employees have to worry about how they will support their family, it can be near impossible to focus on their work. Making sure your insurance benefits cover dependents is a great way to reduce their emotional and financial stress, helping to keep everyone involved happy.
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This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.