Getting to Know GoCo's Benefit Contribution Structures

Understanding Company Classes

First things first, what are Company Classes? Think of them as special groups you can create to categorize employees who share the same benefits eligibility rules. Company classes are a great way to distinguish different employee groups within a company that have different eligibility, waiting periods, termination rules, and contribution structures.

Here’s what a Company Class can affect for reference:

Eligibility: Can the employees enroll in benefits at all?
Plan-specific eligibility: Which plans can the employees see and enroll in?
Waiting Period: How long until a new hire's benefits begin?
Termination Period: How long will an employee's benefits stay active after they are terminated?
Contribution Structure: How much of the employees' benefit plans are paid for by the company?

⚠️ Because these settings have such a big impact, only a member of the GoCo team can create or edit your Company Classes. If you need to make changes, please reach out to our support team!

Examples Breakdown

You might have different rules for the owners of the company vs regular employees.

Here are a couple of examples of how you might set them up:

Everyone: This class includes employees who's Contribution Structure is the typical one being offered.

Owners: This class includes a few people who's contribution amount is increased to 100% company paid for.

OR, you might have different rules for seasonal employees versus year-round employees.

Here are a couple of examples of how you might set them up:

Seasonal: This class includes employees who only work part of the year. They may have a more limited selection of benefit options, and the waiting period before their benefits kick in has been reduced.
Year-Round: This class includes employees who work all year round and might be offered a wider variety of benefit options and a more regular waiting period.

Once a Company Class has been created, a Full Access Admin can assign an employee to a Company Class from their employee profile.

Find the company class assignment in the Employment Info section of employee profiles.

Exploring Contribution Structures

If your company has different waiting periods, eligibility rules, termination rules, or contribution structures, each difference will be made into a company class. Each company class has its own settings for each of these items. You can also offer certain benefit lines (like a PPO vs. an HMO) only to specific Company Classes. Now, let’s expand on the contribution structures. GoCo provides a few different options to fit your needs. Let's walk through each one:

1. By Company Class

This is the most common and straightforward option.
With this structure, the same contribution amount applies to all benefit plans within a specific Company Class. For instance, if you decide to contribute $30 per month for employee dental coverage for your full-time employees, this same $30 contribution will apply to all dental plans offered to that group.

2. By Plan

This option is less common but offers more control.
This is for when your company wants the contribution amount to vary by plan.
For example, you could contribute a different dollar amount for the PPO plan versus the HMO plan, even if both are offered to the same Company Class.

3. Buy-Up Plan

A buy-up plan allows you to define a contribution for a base plan, and employees pay the difference if they choose a more expensive plan.
This structure can only be used if the designated base plan is the least expensive plan. If your base plan is more expensive than another plan you offer, this option will not work.
The system will not allow you to set up a buy-up plan where the base plan is not the lowest cost plan.

4. Lowest Cost Plan

This structure is all about simplicity for the employee.
The system will automatically set the base plan to be the least expensive plan based on each employee's eligibility. This is a great way to ensure employees always have a low-cost option available.

Understanding Waiting Periods

GoCo offers several ways to configure waiting periods for new hires, ensuring their benefits enrollment aligns with your company's policies.

Here's how you can set up a waiting period:

Coverage Begins: You can choose to have coverage begin on the Hire Date or a specific date after a certain period. The period can be measured in days, months, or quarters.
Coverage Terminates: Similarly, you can define when coverage ends for a terminated employee. This can be on the date of termination, the end of the month after termination, or even the 14th of the month after termination.
Below are a few examples of the options you will see when building.

Important Considerations: Individual vs. Combined Rates

As you set up contributions, you'll also encounter individual and combined rates, which can be a bit confusing. Here’s a quick breakdown:

Individual Rates: The company pays a specific dollar amount for each individual (employee, spouse, child, etc.). This is what you would use if, for example, your company only pays for the employee's premium and not for their dependents.
Combined Rates: This is a single, bundled rate that covers the employee and their family (i.e., EE + Spouse, EE +Child, EE+Children, EE +Family).

Pro-Tip: Make sure to select the correct rate type when setting up contributions. If your company only contributes for the employee, you must use individual rates to ensure the contribution is applied correctly.

FAQ

Can employees see their Company Class?

No, employees do not see their assigned Company Class. It is an administrative setting used to group employees for benefits eligibility.

Why can't I edit Company Classes myself?

Because Company Classes have a significant impact on benefit eligibility and enrollment, we've set it up so that only a member of the GoCo team can create or edit them. This ensures accuracy and prevents any accidental issues with your benefits setup.

What happens if I want to change my company class moving forward?

It is important to note that updating a company class can be both a retroactive change and a future change. This means that updating a class could change the benefit enrollments of currently enrolled employees. Please reach out to support@goco.io in order to request this change!

How do I handle a "buy-up" scenario if my base plan isn't the cheapest?

A buy-up plan will not work in this scenario. You can either use a different contribution structure (like "By Plan") or adjust your plan offerings so that the base plan is the least expensive option.

If you have additional questions please contact support@goco.io