NO. The only “benefits” that an employer must offer are Workers Compensation Insurance, which is mandated by Federal law, and Statutory Disability Insurance which is required in only five states and Puerto Rico. Employee benefits were offered to attract workers to employers who had a hard time finding employees during wartime. Over time, medical coverage became an expected benefit, especially at larger employers. However, there is no law requiring an employer to offer any type of employee group benefits.

An HMO (Health Maintenance Organization) is a health insurance plan that allows you to receive care through a network of participating doctors and hospitals. Generally, you select a primary care physician who coordinates your care and refers you to specialists when needed. Care that is not provided by a network physician or hospital is generally not covered under an HMO plan.

An HSA is a way for an employer to reduce costs by offering employees a medical plan with a high deductible while protecting employees from the full affect of that deductible. An HSA allows individuals and families to accrue pre-tax dollars in a savings account from which they can withdraw to cover qualifying medical expenses. The employee is the owner of the HSA account and can take the account with them if he/she moves to another employer or retires.

An HRA is a high-deductible medical plan that allows the employer to fund part of the high deductible on an “as used” basis. This allows the employer to implement a health plan with a generally lower premium than a typical medical plan with in-network co-payments and low out-of-network deductibles and co-insurances.

The employer does not pre-fund the HRA expenses so there is a cash flow savings. The employee and his/her dependents are protected from the high deductible and co-insurance out-of-pocket cost by having the employer partially fund this expense.

Although this varies on a state by state basis, Community Rating generally refers to group medical plans available to smaller employers with up to 50 non-union employees who are eligible for group benefits. The rates for these medical plans are non-negotiable and are based on the location of the employer. Some states, such as Pennsylvania allow the insurance carrier to ask medical questions for groups of less than 20 enrollees. The carrier can adjust the rates within certain limits based on the answers to these questions. Other states, such as New Jersey, allow the insurance carriers to adjust the plan rates based on the gender and average age of the enrolled employees. New York does not allow any variation of the filed rates based on enrollment, age, medical history, etc.

It is a separate benefit plan that allows your employees to direct a part of their pay, tax free, into a special account that they can use throughout the year to reimburse themselves for eligible out-of-pocket expenses. The employer saves money on as a result of reduced FICA and Social Security matching payments. There are three types of FSAs and they include: Health Care FSA for uncovered out of pocket medical expenses; Dependent Care FSA for work related child and adult care; Transportation FSA for job-related parking and public transportation reimbursement.