Employee Benefit Guidance & Compliance Solutions

Posts by BCaplan

Caution of Offering Health Coverage to Non-Employees

Posted by on November 4, 2019 in Human Resources

Is offering health coverage to Non-Employees risky? A frequent Compliance Corner question asks whether employers can include independent contractors in their health plans or other benefits.   When dealing with contractors or temporary employees, many think they are not eligible for their health plans or other benefits such as COBRA or FFCRA. The answer to this question is more complicated than one might think. So, is offering health coverage to non-employees risky? The Scoop Most benefit experts advise against including independent contractors or other non-employees such as 1099 employees, non-employee directors, or leased employees on employer’s benefit plans. Here are three (3) reasons why this may be inadvisable: Treating an independent contractor as an employee may undermine an employer’s assertion that the individual is not an employee. The DOL and the IRS, as well as their state counterparts, have aggressive programs to uncover worker misclassification. By offering a non-employee employee...

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