• Have you wondered how your competitors bid so low?

  • Is your contract as profitable as it should be?

  • Are you having difficulty managing labor costs?

  • Would you like to win more bids?


The Alternatives

The Alternative to Paying Fringes in Cash

Contractors can remove the fringes from payroll and allocate them into a "Bona Fide" Benefit Program. When the health & welfare portion of the wage determination is used to provide non cash benefits for hourly workers, the employer is normally not subject to payroll costs such as FICA, FUTU, SUTA, and workers compensation insurance. Paying the fringe in benefits vs. cash can eliminate payroll expenses in excess of $0.60 per hour worked.

The Alternative to Utilizing a Traditional Benefit Plan

The primary solution to the myriad of problems a contractor encounters when attempting to merge both wage determination and non-wage determination employees under the same benefit plan can often be alleviated via class carve-outs. Without this solution, the contractor usually finds himself in the equivalent situation of forcing a square peg into a round hole. The result is often excess administrative burden and added associated costs that can undermine competitiveness. Insured Benefit Plans would be pleased to suggest means and alternatives to circumvent these negatives within the USDOL acceptable, non-discriminatory procedures.

The Alternative to Self Funding a Benefit Plan

The federal requirements for self-funding the health & welfare portion of the fringe require that all self-funded plans be approved in writing by the USDOL. Only amounts used to pay claims by the employer could be counted towards meeting the fringe obligation. Administrative fees cannot be counted toward the fringe rate and are considered "costs of doing business."

Insured Benefit Plans however, provides fully-insured programs that alleviates this challenge and requires its carriers, or at least their independent administrators, to perform all fiduciary and claims payer functions. Unlike a self-insured plan, the USDOL will allow the cost of administration to be incorporated into a fully insured plan, since the entire fringe is being tendered to an approved insurance carrier. The net effect in so doing is to eliminate insuring risk on the part of the contractor, not to mention elimination of non-deductible expenses such as stop loss insurance and administrative fees.

Benefits vs. Cash

How can we benefit you?

  • Save on payroll assessment taxes
  • Submit more competitive bids
  • Offer medical, dental, vision, disability and life insurance
  • Submit more competitive bids
  • Stay in compliance DOL, IRS and State regulations
Learn more