Fringe benefits and group insurance benefits in form include different kinds of non-wage compensations offered to all employees as well as their regular wages or salaries. Such examples where individual exchanges salaries for some form of fringe benefit is known as “salary swapping.” Other examples include bonuses, honoraries, stock options, and health care. The terms “fringe benefits” and “group insurance benefits” are usually used interchangeably. These terms refer to group insurance benefits offered to all employees as well as their salaries or wages.
These types of group insurance benefits are usually included in the employer’s contract. But in some cases, the employer may offer or contribute these benefits to its employees voluntarily. Group benefits, however, cannot be transferred to other employees; they can only be inherited by the eligible employee upon retirement or termination. Benefits that an employee can receive upon retirement, or that otherwise become taxable, cannot be traded or auctioned off to other employees.
In order to determine the eligibility of a particular employee to receive insurance benefits, both him/her and his/her employer should be evaluated. Group insurance benefits offered to an eligible person are usually tax-deductible to the employee and non-taxable to the employer. This means that the employee is not required to pay tax on fringe benefits to another individual or company. It is important to note that before tax-deductible fringe benefits can be given, an internal audit of the employer’s business practice is required.
There are many advantages associated with group insurance benefits. Among these advantages include: these benefits cover pre-existing conditions. This means that employees are not prohibited from enrolling in group insurance benefits provided to them at the time of employment; they do not have to worry about the cost of premiums until they become eligible for coverage; and they also have the option of providing a substantial lump sum payment in case of a death within the group. As previously mentioned, these benefits are tax-deductible. This can save the family of an eligible employee a considerable amount of money on taxes.
Group insurance benefits typically come with a five-year maximum coverage period. However, the actual coverage period may vary according to an individual employee’s policy. Moreover, group insurance benefits often include long-term care insurance benefits, disability income, and accident benefits. A one-time investment may be converted into a significant amount of money, depending on the tax structure of the particular plan.
Fringe benefits can also be purchased on the Internet. This gives employees more options and often allows them to purchase plan more cheaply online. When purchasing insurance benefits online, it is wise to take advantage of multiple quotes available from competing insurance providers. In most cases, these quotes will be free and provide the employee a greater variety of coverage options and pricing structures. Furthermore, employees can often select several insurance benefits from a single plan.