For a traditional way of offering insurance, companies may consider going directly to an insurer. In this option, benefits are provided through a single insurance carrier. Employers shop and choose workplace plans on a “fixed-benefits” basis.

Key considerations

Companies that want greater control over benefits choices offered to employees or prefer a certain carrier may consider offering insurer-based benefits.

  • The employer chooses the carrier, and plans are offered to employees.
  • Premium costs are agreed upon for a year, so rates won’t change.
  • The insurance carrier assumes the risk of employee claims.
  • Multiple carriers may be necessary for each benefit offering – medical, dental, vision, disability, etc.

Tax credit availability

  • The employer will not be eligible to receive small-business tax credits.
  • Employees may be eligible to receive health insurance marketplace subsidies if their employer’s coverage does not provide minimum value coverage and/or the employee contribution is more than 9.5 percent of the employee’s household income.

Administration and reporting

Plans are administered and managed by the employer. Employers will submit required reporting to the Internal Revenue Service starting in 2016. For more information about reporting requirements:


Employers with 50 or more full-time equivalent employees may be subject to shared-responsibility penalties if coverage either does not meet affordability or minimum value requirements. Employers must offer coverage to 95 percent of full-time employees and their dependents.

Voluntary insurance

Voluntary insurance can be offered as part of a comprehensive benefits package. These benefits provide peace of mind to employees by helping with out-of-pocket costs associated with illness or injury. Learn more at

For more information

A comprehensive summary is available in The Benefits Decision Guide. Learn more at

To learn more about coverage available in your state, visit:, and