Managing employee benefits is a vital part of running any business, but for employers with hourly workforces, there are extra challenges that can strain resources. Traditional insurance billing methods can leave employers in a difficult position, especially when they’re required to pay premiums upfront or handle complex refund processes. At The American Worker, we understand these challenges and have developed a billing model that alleviates the burdens on employers, ensuring a smoother, more efficient process.
In the traditional billing model, insurance providers bill employers once a month for all employees’ premiums, regardless of whether those employees have earned their wages yet. This means employers often must float the money for insurance coverage before they’ve deducted the necessary amounts from employees’ paychecks.
Here’s where it gets tricky: If an employee leaves the company or has a reduced paycheck, the employer is still on the hook for the entire month’s premium. This outdated method not only ties up valuable cash flow, but also puts the employer at risk of covering costs for employees who are no longer contributing to the business.
Our payroll cycle billing model is designed to eliminate these issues. With our approach, coverage starts on or after the employee’s pay date, ensuring that the necessary funds have already been deducted from their paycheck. This means employers are never left covering the cost of insurance for employees who have left the company or haven’t earned enough to pay their full premium.
This method ensures that businesses aren’t paying out-of-pocket for insurance coverage, reducing financial risk and improving cash flow management. Employers only pay for the coverage their employees have earned, giving them greater control and peace of mind.
Another common issue with traditional insurance billing is the handling of partial payments. Let’s say an employee has earned a paycheck but hasn’t earned enough to cover their entire insurance premium. In many cases, insurance providers return that partial payment to the employer, leaving the employer responsible for refunding the employee. This process can be cumbersome, particularly for businesses with large workforces.
At The American Worker, we streamlined this process to take the burden off employers. Instead of returning partial payments to the employer, we offer two convenient options:
- Direct Payment: The employee can pay us the difference in premium directly, ensuring their coverage remains intact.
- Refunds Handled Directly: If a refund is necessary, we process it directly with the employee.
By handling these administrative tasks, we free up time and resources for employers, allowing them to focus on other important aspects of their business.
Why Choose The American Worker?
Our flexible billing model is just one of the ways we strive to make employee benefits management easier for employers. We believe in providing solutions that not only meet your needs but also enhance your operational efficiency. By eliminating the need to front insurance costs and simplifying the refund process, we help you manage your hourly worker benefits with confidence and ease.
If you’re looking for a better way to handle your benefits administration, our team of experts is here to answer any questions you have and show you how our approach can benefit your business.
Ready to Simplify Your Payroll Process?
Contact us today to learn more about how we can support your business with our innovative payroll cycle billing model. Let us take the complexity out of benefits administration so you can focus on what matters most—growing your business.
The American Worker is your trusted partner for tailored insurance solutions for hourly employee groups. With 40 years of experience, we’ve served 250,000+ members nationwide from our Austin, Texas headquarters. Why choose us? We go beyond ACA minimums, delivering comprehensive coverage that fits your needs, your employees, and your budget. If your current benefits program falls short, we’ve got you covered.
Navigating healthcare for hourly employees is easier with us. Our customizable plans, clear communication, and seamless enrollment simplify benefits management. Plus, flexible billing adds convenience. Let’s craft a program that keeps your employees happy and healthy. Partner with The American Worker and elevate your benefits.