For Employers

While most employee benefits are voluntary, many Arizona employers offer a comprehensive benefits package that includes:

• Medical insurance
• Gap Insurance
• Dental insurance
• Vision insurance
• Life insurance
• Short-term disability insurance
• Long-term disability insurance
• Accident insurance
• Critical illness insurance
• Hospital indemnity insurance
• Health Savings Accounts (HSAs)
• Flexible Spending Accounts (FSAs)
• Employee Assistance Programs (EAPs)

A competitive benefits package can help attract and retain top talent while supporting employee health and financial well-being.

Medical insurance helps cover healthcare expenses such as doctor visits, preventive care, hospitalizations, prescriptions, and specialist services.

Gap insurance covers medical expenses that goes towards the medical insurance deductible reducing or eliminating the deductible entirely.

Dental insurance helps pay for preventive, basic, and major dental services, including cleanings, fillings, crowns, orthodontics, and implants (depending on the plan).

Vision insurance helps cover eye exams, prescription glasses, contact lenses, and certain vision correction services.

Disclaimer: Coverage varies by plan design. The benefits described above are general examples and may differ based on the specific plan, carrier, and employer-selected options. Employers and employees should review their specific plan documents for complete coverage details, limitations, exclusions, and eligibility requirements.

Group life insurance provides a death benefit to an employee's designated beneficiary if the employee passes away while covered under the plan.

Many employers provide a basic life insurance benefit at no cost to employees and offer the option to purchase additional voluntary coverage for themselves, spouses, or dependents.

Supplemental insurance plans provide additional financial protection beyond traditional medical coverage. All benefits are paid directly to the employee, not doctors or hospitals. Common options include:

• Accident Insurance - Provides cash benefits for covered injuries resulting from accidents, helping employees pay for deductibles, copays, transportation, or other out-of-pocket expenses.
• Critical Illness Insurance - Provides a lump-sum benefit if an employee is diagnosed with a covered condition such as heart attack, stroke, or cancer.
• Hospital Indemnity Insurance - Pays a cash benefit for covered hospital admissions, stays, or outpatient procedures.
• Disability Insurance - Helps replace a portion of income when an employee cannot work due to a covered illness or injury. Maternity benefits are often included in disability plans.

Supplemental benefits can help employees manage unexpected expenses and reduce financial stress when facing medical events.

Benefits may help employees cover:

• Deductibles
• Coinsurance
• Copayments
• Household expenses
• Lost income
• Travel expenses related to treatment
• Maternity leave

Many supplemental plans are employee-paid, allowing employers to enhance their benefits package with little or no direct cost.

Many employer-sponsored plans allow eligible employees to enroll:

• Spouses
• Domestic partners (if offered by the plan)
• Children and dependents

Eligibility requirements vary by carrier and employer plan design.

Employees can typically enroll during:

• New hire eligibility periods
• Annual Open Enrollment
• Qualifying Life Events (QLEs)

Examples of qualifying life events include:

• Marriage
• Divorce
• Birth or adoption of a child
• Loss of other coverage
• Death of a dependent

Open Enrollment is the designated period each year when employees can:

• Enroll in benefits
• Change plans
• Add or remove dependents
• Elect voluntary benefits

Changes made during Open Enrollment generally remain in effect until the next enrollment period unless a qualifying life event occurs.

Voluntary benefits are optional insurance products that employees may choose to purchase, often through payroll deductions.

Common voluntary benefits include:

• Supplemental life insurance
• Accident insurance
• Critical illness insurance
• Hospital indemnity insurance
• Disability insurance

Costs vary based on factors such as:

• Employer size
• Industry
• Employee demographics
• Plan design
• Carrier selection
• Employer contribution strategy

Many employers share the cost of medical, dental, vision, and life insurance with employees while offering voluntary benefits on an employee-paid basis.

When evaluating benefits, employers should consider:

• Workforce demographics
• Recruiting and retention goals
• Budget considerations
• Employee feedback
• Compliance requirements
• Carrier networks and plan options

A benefits advisor or broker can help compare plans and build a package that aligns with company goals and employee needs.

A strong benefits program can:

• Improve employee satisfaction
• Support workforce health and wellness
• Increase retention
• Enhance recruiting efforts
• Reduce financial stress
• Strengthen company culture

Employees increasingly view benefits as a key component of their overall compensation package, making them an important investment for Arizona employers.

When selecting a health insurance strategy, Arizona employers often compare Fully Insured and Level-Funded health plans. Both provide medical coverage for employees, but they differ in how claims are funded and how costs are managed.

With a fully insured plan, the employer pays a fixed monthly premium to an insurance carrier. The carrier assumes the financial risk for employee healthcare claims.

Key Features:

• Predictable monthly premiums
• Insurance carrier pays covered claims
• Simplified administration
• Typically includes access to provider networks and compliance support
• Premiums may increase at renewal based on overall claims experience and market factors

Best for:

• Employers seeking predictable costs
• Smaller businesses that prefer minimal financial risk
• Organizations that value administrative simplicity

A level-funded plan combines elements of a traditional fully insured plan and a self-funded plan. Employers pay a fixed monthly amount that covers:

• Estimated claims costs
• Administrative fees
• Stop-loss insurance protection

If employee claims are lower than expected, the employer may receive a premium refund or surplus credit at the end of the plan year, depending on the plan's structure.

Key Features:

• Fixed monthly payments
• Stop-loss insurance protects against large claims
• Potential for claims savings or refunds
• Greater visibility into claims trends and utilization
• Often available to small and mid-sized employers
• Typically 20% - 30% less expensive than Fully Insured plans

Best for:

• Employers with relatively healthy employee populations
• Businesses looking for potential cost savings
• Organizations interested in greater transparency into healthcare spending

Fully Insured vs. Level-Funded: Side-by-Side Comparison

Not exactly.

Traditional self-funded plans require employers to pay claims as they occur and assume more financial risk. Level-funded plans are designed to provide many of the advantages of self-funding while maintaining predictable monthly payments and stop-loss protection.

The best choice depends on factors such as:

• Company size
• Employee demographics
• Claims history
• Budget goals
• Risk tolerance
• Desire for cost transparency
• Employers seeking stable, hands-off administration often prefer fully insured plans.

Employers interested in potential savings and greater control over healthcare spending may find level-funded plans attractive.

Yes. Many carriers now offer level-funded solutions for businesses with as few as 2 enrolled employees, although eligibility requirements vary by carrier and underwriting guidelines.

Before choosing a funding strategy, consider asking:

• What are the total expected annual costs?
• Is there an opportunity for a claims surplus refund?
• How much stop-loss protection is included?
• What happens if claims are higher than expected?
• How are renewal rates determined?
• What reporting and claims data will be available?
• Are the provider networks and benefits comparable?

Understanding both funding options can help employers build a benefits strategy that balances cost control, employee satisfaction, and long-term financial goals.

The PCORI fee (Patient-Centered Outcomes Research Institute fee) is an annual federal excise tax created by the Affordable Care Act (ACA). It is paid by health insurance issuers and plan sponsors of self-insured health plans to fund clinical effectiveness research. Level Funded and Alternative Funded plans are also considered self-insured plans for the purposes of PCORI fees.