Limited Benefit Health Plans for Government Contractors
The Problem - Providing Medical Benefits under SCA / Davis Bacon Act
Providing medical benefits under projects covered by the Service Contract Act or Davis Bacon Act can be difficult to quantify. Individual contracts may have different requirements for Fringe Benefits at different times. Employees working under these contracts often work irregular hours and patterns during any given week or month. Several key items must be considered in order to appropriately craft and provide benefits under The Service Contract Act (SCA). A Traditional Medical Plan may encounter the following problems:
- Monthly premiums do not match the given fringe rate
- Employees work varying hours or are part-time and do not meet the requirements of a medical plan
- Employees turn over at a high rate, causing premium shortfalls and tracking problems
Government service contractors cannot alter, eliminate, or save any part of their hourly health and welfare wage determination contribution. It must be spent in full. This inability to reduce – or cut – premium expense diminishes the relative cost vs. benefit, and greatly elevates the already important issue of service, to both the company client, and especially to their employees.
The Solution - An Hourly Indexed Limited Benefit Medical Plan
An Hourly Indexed Limited Benefit Medical Plan offered through America Protect® solves these problems and gains several Key Advantages.
- It offers the same plan to ALL contract employees, whether full-time, part-time, variable or consistent work hours
- It accepts and administers employee “hours worked premium” in the same manner required by the D.O.L. Wage determination. In other words, both benefit contributions and premium payment is matched or “hourly indexed”
- Provides Fringe Benefits as specified in the Service Contract Act.
- It Reduces Payroll Costs
- It avails the contractor to either tiered or composite rates
- Coverage is without pre-existing conditions or qualifying medical questions
Increase Your Profitability with a Limited Benefit Health Plan
Using the Savings Calculator below, you can determine how much your company will save by providing a “bona fide” fringe benefit instead of paying the Health and Welfare directly in the employees’ paychecks. As of June 1, 2008 the hourly “Fringe” rate for all New SCA contracts will be $3.24.
