Employers often have questions on practical considerations related to healthcare, retirement and other employee benefit regulations. In this “Since you asked” feature, we discuss the provision of health insurance to board members and their dependents.
Can our company provide benefits under our group health plan to members of the company’s board of directors who are not employees? We would like to provide coverage for retention and recruiting purposes.
Possibly, but various compliance concerns need to be addressed.
Covering non-employees (whether directors, board members or owners) under a company's benefit programs is likely to raise compliance concerns (assuming the written plan eligibility rules allow non-employees to enroll in coverage). For one, it is unclear whether a Multiple Employer Welfare Arrangement (MEWA) is created when health or other welfare benefits are provided to non-employee directors.
Generally, the coverage for the non-employee director cannot be pre-tax under the cafeteria plan rules, although there is a special rule for certain "dual status" individuals (i.e., directors who are also employees).
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Insider December 2022 | .1 MB |