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  • The Internal Revenue Service (IRS) has officially announced the 2026 contribution limits for Health Savings Accounts (HSAs), providing employers and employees with an early opportunity to plan ahead. These updated caps reflect the ongoing impact of inflation on health care costs and signal a continued trend toward higher savings opportunities for those enrolled in high-deductible health plans (HDHPs).

    2026 HSA Contribution Limits

    Starting on January 1, 2026, the HSA contribution caps will increase to the following:

    • Individual coverage: $4,400 (up from $4,300 in 2025)
    • Family coverage: $8,750 (up from $8,550 in 2025)
    • Catch-up contributions (Age 55+): Remain unchanged at $1,000

    To contribute to an HSA, employees must be enrolled in a HDHP. The 2026 IRS thresholds for HDHPs are also increasing:

    Minimum deductible:

    • Self-only: $1,700
    • Family: $3,400

    Maximum out-of-pocket limit:

    • Self-only: $8,500
    • Family: $17,000

    These increases are tied to inflation adjustments and are part of a broader trend to help individuals better prepare for growing health care expenses.

    Why This Matters for Employers 

    As the cost of health care continues to climb, HSAs remain a powerful tool for both employers and employees. They offer triple tax advantages, pre-tax contributions, tax-free interest and investment earnings, and tax-free withdrawals for qualified medical expenses.

    For employers, offering an HSA as part of your benefits package not only enhances your overall offerings but also encourages cost-conscious health care choices and long-term savings among employees. With 2026 limits now available, proactive planning can help you maximize these benefits for your workforce.

    Steps Employers Should Take

    Now is the time to begin evaluating your benefits strategy for the year ahead. Employers can take the following actions today:

    • Review your current HDHP offerings: Ensure that your health plans for 2026 will meet the updated deductible and out-of-pocket requirements for HSA eligibility.
    • Update your employee education materials: Inform employees early about the upcoming changes so they can make informed decisions during open enrollment.
    • Assess contribution matching strategies: Consider increasing employer HSA contributions to align with the new caps. This can boost employee retention and improve financial wellness.
    • Incorporate Flexible Spending Accounts (FSAs): Complement your HSA offerings with FSAs for employees who may not be enrolled in HDHPs, allowing more flexibility in managing health care costs.
    • Partner with a trusted benefits administrator: Working with a knowledgeable third-party administrator can streamline compliance, simplify plan management, and ensure you’re making the most of tax-advantaged benefits.

    How GMS Can Help Strengthen Your Benefits Program

    At Group Management Services (GMS), our benefits experts are here to help you make the most of your health savings offerings. We provide:

    • Expert guidance on plan design and compliance to ensure your HDHPs and HSAs meet IRS requirements.
    • HSA and FSA administration services to simplify account management and reduce administrative burden.
    • Comprehensive group health insurance plans that integrate seamlessly with savings accounts.
    • Employee education tools to help your workforce understand and utilize their benefits effectively.

    Offering HSAs and FSAs is more than just a checkbox; it’s a strategic advantage. With GMS as your partner, you can ensure your benefits program is compliant, competitive, and built to support the health and financial wellness of your employees.

    Ready to elevate your benefits strategy for 2026? Contact GMS today to get started.

  • Health insurance is one of the most important benefits you offer as an employer. It supports your team’s well-being, helps you stay competitive in the job market, and represents a major part of your annual budget. However, the renewal process can be complex, time-consuming, and, if not handled strategically, expensive. While many businesses renew their health plans in January, many others are on off-cycle renewals throughout the year. Regardless of your timeline, the fundamentals of a successful renewal process are the same.

    In this guide, we’ll walk you through how to prepare for your health care renewal, what to consider at each stage of the process, and how to make strategic decisions that support your business and your employees. While this process can be painful and daunting, GMS has built a better way to simplify and streamline your health care renewal.

    Why Health Care Renewals Matter

    Rising health care costs and a competitive labor market make benefits decisions more important than ever. According to the Kaiser Family Foundation, average annual premiums for employer-sponsored family health insurance was $25,572. This represents a 7% increase from the previous year and is the second consecutive year with a 7% rise. On average, workers contributed $6,296 towards the cost of family coverage, while employers covered the remaining portion.

    Renewals are your annual opportunity to reassess that investment. Do your current offerings still align with your budget, workforce needs, and business goals? Are there more cost-effective or attractive options available?

    A well-planned renewal process helps you:

    • Control premium costs
    • Improve plan design
    • Boost employee satisfaction and retention
    • Ensure compliance with regulations

    When Should You Start the Renewal Process?

    The benefits renewal process should ideally begin six months before your renewal date, whether that’s in January or any other month. A thoughtful, phased approach allows time for plan evaluation, carrier negotiations, employee education, and smooth implementation.

    Here’s a closer look at what to do at each stage:

    180 to 120 Days Before Renewal: Set the Foundation

    Evaluate Your Broker or Provider

    Is your current broker actively bringing you competitive options? Are they proactive about managing costs, staying compliant, and providing strategic guidance? If not, this is a good time to explore new partnerships.

    Review Current Plan Performance

    Gather data on claims history, plan usage, employee feedback, and overall satisfaction. Analyze what’s working and what isn’t.

    Define Your Budget

    Project costs for the coming year. Consider employee contributions, company cost-sharing, and potential cost-containment strategies like changing networks or plan types.

    Assess Workforce Needs

    Has your team grown since your last health care renewal? Are employees asking for more flexibility or different coverage levels? Use employee surveys or HR insights to guide plan design.

    120 to 90 Days Before Renewal: Explore Your Options

    Compare Plan Options

    During this period, your broker or provider should begin presenting new plan options based on your goals and budget. Look at premiums, deductibles, copays, networks, and value-added services.

    Consider Supplemental Benefits

    If you’re not already offering dental, vision, or mental health benefits, this is a good time to explore bundling options to increase employee value without significantly raising costs.

    Develop a Communication Strategy

    Start preparing to educate employees about potential policy changes. Clear, consistent communication reduces confusion and improves engagement during open enrollment.

    90 to 60 Days Before Renewal: Quote and Evaluate

    Submit Data for Quotes

    Provide finalized census and plan information so carriers can generate official quotes.

    Evaluate Final Options

    Compare quotes and weigh your choices against your budget, workforce needs, and strategic goals. Look beyond just premiums, consider long-term value, and plan stability.

    Inform Employees Early

    To improve participation and employee satisfaction, begin preparing employees for what’s coming. Share timelines, answers to frequently asked questions (FAQs), and who to contact for help.

    60 Days or Less: Make Decisions

    Make Your Final Selection

    Choose your carrier and plan design. Sign all required documents and ensure compliance with any federal or state requirements, including Affordable Care Act (ACA) reporting and Consolidated Omnibus Budget Reconciliation Act (COBRA) rules.

    Prepare for Open Enrollment

    Finalize employee materials and schedule enrollment meetings or virtual sessions. Ensure HR and management teams are trained to support the process.

    Launch Open Enrollment

    Make the process as simple and accessible as possible. Provide digital tools, enrollment assistance, and ample time for employees to ask questions and make decisions.

    How GMS Can Help

    At Group Management Services (GMS), we simplify the health care renewal process with expert support and integrated technology designed to make benefits administration easier, more secure, and more efficient.

    When you partner with GMS, you get:

    Custom group health plans

    We have developed a comprehensive Master Health Plan (MHP), integrating top national and regional voluntary benefits to offer affordable and flexible plan options. GMS is the only certified professional employer organization (CPEO) that provides an in-house master health plan that helps you avoid large swings in usage, trends, and renewal rates.

    Strategic benefits support

    Our benefits experts offer comprehensive guidance on maximizing your plans, ensuring compliance, and navigating ACA regulations. They also provide employee training on plan details and address complex health plan questions. Additionally, our Implementation Specialists work closely with owners and employees to ensure a seamless transition, offering personalized support and assistance throughout the process.

    All-in-one HR technology

    With GMS Connect, our cloud-based HR platform, you can manage benefits, payroll, and employee records in one secure system.

    You do not have to navigate health care renewals alone. GMS makes it easier to manage the entire process while improving the employee experience. By leveraging our collective buying power, diverse coverage options, and comprehensive administrative support, you can significantly lower your group health care premiums while providing your employees with top-tier benefits.

    Want help simplifying your next renewal? Contact GMS today and let’s start planning for a healthier, more efficient future for your business.

  • Short-term disability insurance is a crucial benefit that provides employees with financial protection when they are temporarily unable to work due to a medical condition. For employers, offering short-term disability insurance can enhance recruitment efforts, improve employee retention, and contribute to a healthier workforce. 

    This blog will walk you through everything you need to know about short-term disability insurance, including what it covers, its benefits for both employers and employees, supplemental insurance options, and how to integrate it into your benefits package. 

    What Is Short-Term Disability Insurance? 

    Short-term disability insurance replaces a portion of an employee’s income when they cannot work due to non-work-related illnesses, injuries, or medical conditions. Unlike workers’ compensation, which covers work-related injuries, short-term disability insurance provides coverage for medical issues that occur outside of the workplace. 

    What Does It Cover? 

    Short-term disability insurance typically covers conditions that temporarily prevent an employee from working, such as: 

    • Recovery from surgery 
    • Severe illnesses (e.g., pneumonia, COVID-19 complications) 
    • Pregnancy and childbirth recovery 
    • Injuries like fractures or sprains 
    • Mental health conditions requiring hospitalization or extended treatment 

    How Long Does Coverage Last? 

    Most short-term disability policies provide benefits for three to six months, depending on the plan. There is usually a waiting period of seven to 14 days before benefits begin, meaning employees must use sick leave or unpaid time off before their short-term disability coverage takes effect. 

    Is Short-Term Disability Insurance Necessary? 

    Short-term disability insurance can help ensure you and your loved ones are financially supported while you recover. To decide if it’s right for you, consider whether you have enough savings to cover living expenses and medical costs, if you have dependents relying on your income, if you’re at higher risk due to health or job factors, and if you qualify for any disability benefits. Ultimately, the decision depends on your personal circumstances and financial situation. 

    The Benefits of Offering Short-Term Disability Insurance 

    For Employers 

    • Improved recruitment and retention: A strong benefits package, including short-term disability insurance, can set your company apart in a competitive job market. Employees are more likely to stay with a company that offers financial security in case of medical emergencies. 
    • Increased productivity: Employees with access to short-term disability benefits are more likely to take the necessary time to recover before returning to work, reducing the risk of prolonged absences due to untreated conditions. 
    • Reduced turnover costs: Employees who feel supported during medical hardships are more likely to stay with their employer, reducing turnover costs associated with hiring and training new workers. 

    For Employees 

    • Financial stability during recovery: Short-term disability insurance provides a percentage of an employee’s income (typically 50-70% of their salary) during their leave, allowing them to cover essential expenses like rent, utilities, and medical bills. 
    • Peace of mind: Knowing they have financial support while recovering allows employees to focus on their health without the stress of lost wages. 
    • Faster return to work: Employees who can afford proper medical care and recovery time are more likely to return to work in a healthier, more productive state. 

    Supplemental Insurance Benefits 

    Some businesses offer short-term disability insurance as a supplemental benefit, meaning employees can opt into coverage and pay premiums themselves. This approach allows businesses to provide an essential benefit without increasing costs. 

    Additionally, employers can enhance their benefits package by offering supplemental insurance options, such as: 

    • Long-term disability insurance: Provides coverage for extended medical leaves lasting six months or longer. 
    • Accident insurance: Covers medical expenses related to unexpected injuries. 
    • Critical illness insurance: Offers financial support for serious illnesses like cancer, heart disease, or stroke. 

    By giving employees access to these supplemental benefits, businesses can create a well-rounded benefits package that supports workforce well-being. 

    Short-Term Vs. Long-Term Disability Insurance 

    Short-term disability insurance provides coverage for a limited period, typically up to six months, for disabilities that temporarily prevent you from working. It helps replace a portion of your income during recovery from illnesses, injuries, or surgeries. 

    On the other hand, long-term disability insurance offers coverage for extended periods, often several years or until retirement age, for disabilities that significantly impact your ability to work long-term. It provides a more substantial income replacement to support you over a longer duration. 

    How to Integrate Short-Term Disability Insurance into Your Benefits Package 

    If you’re considering adding short-term disability insurance to your employee benefits, follow these steps to ensure a smooth integration: 

    1. Assess Employee Needs

    Survey your employees or analyze past leave requests to determine whether short-term disability insurance would be valuable for your workforce. 

    1. Choose the Right Coverage

    Work with an insurance provider or a professional employer organization (PEO) like Group Management Services (GMS) to find a plan that aligns with your company’s budget and employee needs. 

    1. Communicate the Benefits Clearly

    Ensure employees understand: 

    • What the coverage includes 
    • How to enroll 
    • How to file a claim when needed 
    1. Partner with a PEO for Simplified Benefits Administration

    Managing short-term disability insurance and other benefits can be complex, especially for small and mid-sized businesses. GMS simplifies benefits administration by: 

    • Connecting you with top insurance providers 
    • Handling enrollment and claims processing 
    • Ensuring compliance with federal and state regulations 

    How GMS Can Help 

    At Group Management Services (GMS), we specialize in helping small to midsize businesses implement cost-effective, comprehensive benefits packages that include short-term disability insurance. 

    Why partner with GMS? 

    • Competitive rates: Access to top insurance providers for competitive rates. 
    • Tailored solutions: Customized benefits solutions tailored to your company’s needs. 
    • Big business health benefits: Greater buying power through economies of scale. 

    Our Master Health Plan (MHP) offers access to one of the largest national networks, providing significant savings on both employee and family premiums. 

    Offering short-term disability insurance is a smart investment that enhances your company’s appeal, supports employee well-being, and creates a more productive workplace. Let GMS help you design and implement a benefits package that works for your business and your employees. 

    Ready to learn more? Contact GMS today to explore your options! 

  • Employee Assistance Programs (EAPs) are a workplace resource designed to help employees address personal and professional challenges that may impact their well-being, job performance, and overall productivity. These programs provide confidential, no-cost access to counseling and support for issues such as mental health, substance abuse, legal concerns, financial planning, and more. 

    According to the Society for Human Resource Management (SHRM), in 2024, 68% of small companies with 50-99 employees offered an EAP. This growing adoption reflects the effectiveness of EAPs in promoting employee wellness and driving organizational success. For employers, these programs aren’t just a way to support workers; they are a strategic investment in a healthier, more engaged workforce. 

    How Does An Employee Assistance Program Work? 

    EAPs operate as a confidential resource that employees can access 24/7. Employees may self-refer or be referred by a manager for challenges that might affect their job performance. Common services include: 

    • Mental health counseling: Assistance for depression, anxiety, grief, or trauma, delivered by licensed professionals. 
    • Substance abuse support: Access to addiction recovery resources and tools to maintain sobriety. 
    • Legal and financial assistance: Guidance on legal issues such as landlord disputes or financial challenges like debt management. 
    • Work-life balance solutions: Help with parenting, eldercare, and time management concerns. 

    EAP services are typically accessed through phone lines, online portals, or in-person sessions, ensuring flexibility and convenience for employees. Employers pay a flat fee per employee to the provider, making it a cost-effective solution with measurable benefits. 

    Benefits Of Implementing An EAP 

    Boost employee well-being 

    Mental health challenges are the leading cause of lost productivity worldwide. In 2024, 80% of employees reported experiencing workplace stress, with many citing it as a barrier to peak performance. EAPs can reduce this burden, offering timely interventions that help employees return to work with focus and confidence. 

    Enhance productivity 

    Employees struggling with personal challenges are five times more likely to be distracted on the job. Studies from 2024 reveal that businesses with EAPs reported a 25% reduction in absenteeism and a significant improvement in employee focus. 

    Lower turnover rates 

    Employees who feel supported by their employer are more likely to stay. Data shows that companies with robust EAPs saw 20% lower turnover rates than those without, saving an average of $15,000 per employee in rehiring costs. 

    Reduce healthcare costs 

    EAPs lead to proactive problem-solving, preventing issues like burnout or substance abuse from escalating into costly medical claims. According to recent reports, every dollar invested in an EAP generates a $3 return in reduced health care and productivity costs. 

    Requirements For Offering An EAP 

    While EAPs aren’t federally mandated, some state laws or industry standards may require support services. For instance, federal contractors and safety-sensitive industries often have stricter requirements for employee support due to compliance with Occupational Safety and Health Administration (OSHA) or Department of Transportation (DOT) regulations. 

    To remain competitive, many small and midsize businesses (SMBs) have begun voluntarily implementing EAPs, which ensures they can attract and retain talent in a challenging labor market. 

    How To Offer And Promote An EAP 

    • Select the right provider: Not all EAPs are created equal. Choose a provider that offers comprehensive services tailored to your workforce. Look for flexibility in delivery methods (virtual, phone, or in-person) and high utilization rates. 
    • Communicate the program’s value: Employee buy-in starts with education. Use onboarding materials, posters, and regular email campaigns to highlight EAP benefits. Emphasize confidentiality to alleviate fears about using the program. 
    • Encourage participation: Integrate the EAP into your workplace culture by discussing it openly during meetings or wellness events. Managers can also be trained to recognize when employees might benefit from EAP services. 
    • Monitor and optimize: Use provider reports to track utilization and feedback. For example, if only 10% of employees access the program, consider whether communication strategies need improvement. 

    How GMS Can Help 

    Employee expectations will continue to evolve in 2025, emphasizing holistic wellness and mental health support. EAPs are no longer an optional perk; they are necessary for businesses seeking to attract, engage, and retain top talent in a competitive labor market. 

    When you partner with Group Management Services (GMS), you gain access to a top-tier EAP provider as part of a comprehensive benefits package. With over 25 years of expertise, we understand the importance of tailoring solutions to meet the specific needs of SMBs. 

    Our team manages the complexities of EAP administration, from onboarding to compliance, so you can focus on running your business. Additionally, GMS helps integrate the program seamlessly with other HR initiatives, such as employee wellness programs and performance management systems. 

    Don’t wait to invest in your employees’ well-being. Partner with GMS to build a benefits program prioritizing your workforce while driving measurable business outcomes. 

  • In today’s competitive job market, employee benefits are more critical than ever. As we look ahead to 2025, the demand for comprehensive, flexible, and tailored benefits packages is only expected to grow. Small businesses, in particular, may feel challenged to keep up with larger companies that have greater resources to devote to benefits. But with strategic planning, even smaller organizations can offer in-demand benefits that can attract and retain top talent.

    Health Care Benefits That Go Beyond The Basics

    Health care remains a top priority for employees, with benefits such as medical, dental, and vision coverage being nearly universal expectations. But in 2025, employees are looking for more than just basic health plans. Telemedicine, mental health resources, and wellness programs are becoming increasingly popular.

    • Telemedicine and virtual health care: Employees value the convenience and flexibility of telemedicine, especially for routine check-ups and non-emergency consultations. Small businesses can offer access to telemedicine services, which are typically affordable and easy to add to existing plans.
    • Mental health support: Mental wellness is now recognized as a vital piece of overall employee health. Offering access to counseling, mental health apps, or employee assistance programs (EAPs) demonstrates a commitment to employee well-being.
    • Wellness programs: Programs that encourage healthy living appeal to employees who want to prioritize their health. These benefits can include gym memberships, wellness coaching, and more.

    Competitive Retirement Plans To Secure Employees’ Futures

    With the Internal Revenue Service (IRS) increasing retirement plan contribution limits in 2025, employees should be more aware now than ever of the importance of securing their financial future. A well-structured retirement plan can be a powerful tool in attracting talent. Employers should consider offering incentives such as:

    • 401(k) matching contributions: Offering a company match on 401(k) contributions is an attractive benefit for employees, providing immediate financial value. Even a modest match such as 3% can help retain employees and show commitment to their long-term financial well-being.
    • Automatic enrollment and Roth 401(k) options: Automatic enrollment helps increase participation rates and simplifies the process for employees. As part of the SECURE 2.0 Act, all newly established 401(k) plans will automatically enroll eligible employees unless they opt-out. Roth 401(k) options, which offer tax-free withdrawals in retirement, are also popular among employees looking for tax-advantaged retirement strategies.

    Flexible Work Options For A Better Work-Life Balance

    The demand for flexible work options has only intensified post-pandemic, with many employees now expecting remote work, hybrid arrangements, or flexible schedules as standards.

    • Remote and hybrid work arrangements: Flexibility is no longer just a perk; it’s a priority for many employees. Businesses can appeal to top talent by offering options to work from home, even if just part of the time.
    • Flexible scheduling: Employees appreciate the ability to adjust their work hours to accommodate personal responsibilities, whether it’s picking up children from school or attending a doctor’s appointment. Flexible scheduling supports a work-life balance and reduces burnout.

    Paid Family Leave And Expanded Leave Options

    With work-life balance being a high priority for employees, having comprehensive leave policies in place are increasingly important. Employees expect to see options for paid parental leave, family medical leave, and even leave for mental health days.

    • Parental and family leave: Offering paid time off (PTO) for new parents or employees caring for a sick family member demonstrates empathy and builds loyalty. Small businesses may not be able to offer extensive leave but can explore affordable options to support employees during these life changes.
    • Paid time off flexibility: Employees appreciate flexible PTO policies, such as consolidated leave or even unlimited PTO. Flexible policies allow employees to take time off without worrying about strict caps or regulations, fostering a culture of trust and respect.

    Career Development And Educational Benefits

    Employees, especially Millennials and Generation Z, want jobs that offer growth and development opportunities. Providing access to career development resources is another powerful way to attract and retain ambitious, forward-looking employees.

    • Professional development programs: Opportunities for skill-building through workshops, courses, or seminars can make your company more attractive to candidates eager to learn. Many small businesses partner with online learning platforms to offer employees free or discounted courses.
    • Tuition reimbursement: While this benefit can be costly, it’s also highly attractive for employees interested in furthering their education. Offering partial tuition reimbursement can be a more affordable way to provide this benefit without full financial commitment.

    Financial Wellness And Student Loan Assistance

    Financial wellness benefits, such as student loan assistance, are in high demand, particularly among younger employees who may be carrying educational debt.

    • Student loan repayment assistance: Many employees still face significant student loan debt. Offering a student loan assistance program can make your business especially attractive to candidates early in their careers.
    • Financial education programs: Resources such as financial planning workshops or one-on-one consultations with financial advisors can help employees make informed financial decisions and feel more secure in their financial well-being.

    A Strong Company Culture To Complement Benefits Offerings

    A positive workplace culture is just as important to employees as specific benefits offerings. Some ways to encourage a healthy company culture include:

    • Team-building activities: Organizing events and initiatives encourages collaboration and camaraderie among staff, strengthening team dynamics.

    How Small Businesses Can Compete

    Offering competitive benefits doesn’t necessarily mean matching larger companies dollar-for-dollar. Small businesses can strategically focus on benefits that their employees value most and find creative ways to deliver them. By prioritizing employee needs, open communication, and being transparent about available resources, smaller companies can attract and retain talent effectively.

    At GMS, we specialize in helping businesses maximize their benefits offerings to meet evolving employee expectations. Our benefits administration services streamline health insurance, retirement plans, and other employee benefits to help businesses recruit and retain top talent.

    Partner with GMS to create a benefits package that meets today’s workforce expectations and positions your business as the ideal company to work for.

  • As we approach the end of the year, it’s a crucial time for Flexible Spending Account (FSA) holders to review their balances and ensure they’re maximizing these pre-tax dollars. While FSAs provide valuable tax benefits, they come with strict use-it-or-lose-it rules that can leave employees forfeiting funds if they don’t act before the year ends.  

    Continue reading to learn what both employers and employees need to know about FSAs, critical deadlines, and strategies to avoid losing these hard-earned savings. 

    Key Deadlines For FSAs 

    Flexible Spending Accounts generally have a calendar-year plan, which means that for many, December 31st is the last day to incur eligible expenses. According to the IRS, however, employers can offer one of these options that provide additional flexibility: 

    1. Grace period: Allows employees an extra two and a half months after year-end to use any remaining FSA funds. 
    2. Carryover option: Permits employees to roll over up to $640 of unused funds (as of 2024) into the next plan year while forfeiting any remaining balance beyond this limit. 

    Employers may offer one of these options but not both. It’s critical for employees to check with their HR departments to know which option, if any, applies to their account. 

    What Employees Should Know 

    Employees looking to make the most of their FSAs before the deadline should consider the following steps: 

    • Review eligible expenses: FSAs cover a wide range of medical, dental, and vision expenses. Typical eligible expenses include prescription medications, copays, and medical equipment. Click here for an entire store of qualifying expenses, which can be helpful in planning year-end spending. 
    • Schedule appointments and fill prescriptions: Many health care providers and pharmacies book up quickly toward the end of the year. Employees should consider scheduling any necessary medical, dental, or vision appointments as soon as possible. 
    • Invest in health products: Many over-the-counter products, such as first aid kits, blood pressure monitors, and even sunscreen, are FSA-eligible. Employees can use up their remaining funds on these items. 
    • Track spending carefully: It’s essential to keep receipts and track spending, as some items may need documentation for reimbursement. Additionally, employees should confirm their remaining balance through their FSA provider to avoid overspending. 

    Important Considerations For Employers 

    Employers play a vital role in helping employees understand and maximize their FSA benefits. Here are some key points for employers to keep in mind: 

    • Communicate deadlines: Employers should remind employees of year-end deadlines and if there are grace periods or carryover options in place. Clear communication can help employees make informed spending decisions. 
    • Encourage education on eligible expenses: Many employees may not be aware of the full range of FSA-eligible expenses. Employers can consider sharing resources or holding informational sessions to help employees make the most of their funds. 
    • Evaluate FSA options for the next year: Offering a grace period or carryover option can provide employees with valuable flexibility, and it may encourage higher FSA participation rates. Employers should assess these options annually to determine which choice best aligns with their company’s goals and employee needs. 

    How GMS Can Help 

    FSAs are a valuable employee benefit, but managing them effectively requires clear communication and guidance. Group Management Services (GMS) assists businesses in structuring and managing their benefits packages, including FSAs, to optimize value for both employees and employers. From helping you select the best FSA options to educating your workforce about deadlines and eligible expenses, GMS provides comprehensive support to make year-end planning seamless. 

    Don’t let your employees lose out on the benefits they deserve. Contact GMS today to maximize the impact of your company’s FSA offerings. 

  • Setting up a 401(k) plan for your small business not only helps you stand out in the competitive job market but also offers tax credits, deductions, and retirement savings for business owners. With the passing of SECURE Act 2.0, small businesses can take advantage of even more tax incentives, making a 401(k) plan more lucrative.

    The following steps will help get you started on establishing a 401(k) for your employees.

    Why Offer A 401(k) Plan?

    Many business owners assume a 401(k) plan is too costly or complex, but the benefits can far outweigh the negatives. By offering a 401(k) plan you can:

    • Attract and retain top talent: A recent study found that after health insurance, retirement plans are tied with company leave as the second most sought-after benefit. This study also found that 401(k) plans can help reduce turnover rates and boost retention by 81%.
    • Access tax credits: Small businesses with 50 employees or less may qualify for up to $5,000 per year in startup tax credits for the first three years, and an additional $500 annually for automatic enrollment, adding up to a potential $16,500 in total savings.
    • Secure retirement savings: A 401(k) plan lets business owners contribute to their own retirement savings while offering tax-deductible contributions for their company.

    Step 1: Research Retirement Options

    If you don’t have a 401(k) set up for your business, begin by exploring providers. Look into reputable financial institutions that offer robust support, payroll integration, and easy administration. Seek feedback from other small business owners about their experiences and consider a provider that can serve you for the long term.

    Consider factors such as:

    • Cost: How much is the plan? Is there a monthly fee associated with managing the plan?
    • Investment options: What funds are available in the plan?
    • Advice and guidance: Is there advice or counsel offered for participants?
    • Customer support: Is there easy access to reliable support if technical questions arise?

    Step 2: Choose Your 401(k) Plan Type

    Once you have a provider, select one or more plan types that best fits your business and employees’ needs:

    A traditional 401(k) allows employees to make pre-tax contributions via payroll deductions. Employers can contribute on behalf of employees, offer matching contributions, or both, with these contributions potentially subject to a vesting schedule. This plan must meet nondiscrimination requirements through annual actual deferral percentage (ADP), actual contribution percentage (ACP), and top-heavy tests to ensure fairness to ensure fairness. to ensure fairness.

    A Roth 401(k) is similar to traditional plans but contributions are made with after-tax dollars. This means withdrawals from the account are tax free upon retirement.

    The safe harbor 401(k) also resembles traditional plans except this plan requires employers to make contributions that employees own right away. These contributions can either match what employees put in or be a set amount for everyone who qualifies. A safe harbor plan doesn’t have to pass the ADP or ACP tests if employers provide their employees with clear and timely information about how the plan works and what their rights are.

    Lastly, the SIMPLE 401(k) is designed for small businesses with 100 or fewer employees. It is not subject to annual nondiscrimination tests and requires fully vested employer contributions. However, employees cannot receive contributions under other plans of the employer. If an employer offers alternative retirement plans, an employee utilizing the SIMPLE 401(k) plan can’t maintain those options.

    Once you have your plan type(s) selected, you should then consider other factors such as automatic enrollment and matching contributions. Automatic enrollment self-enrolls employees in your company’s plan, increasing participation rates and potentially qualifying your business for extra tax credits. Matching contributions is when an employer matches an employee’s 401k contribution up to a certain percentage of the employee’s salary.

    Step 3: Create A 401(k) Plan Document

    Draft a plan document that meets IRS requirements and outlines the specifics of your retirement plan. This document will include the plan’s terms, contribution structure, and eligibility criteria. Work with your provider to ensure compliance with federal regulations.

    Step 4: Set Up A Trust To Hold Plan Assets

    All 401(k) plan assets must be held in a trust to protect participants’ interests. Appoint at least one trustee to manage contributions, investments, and distributions, ensuring the plan’s financial integrity.

    Step 5: Maintain Accurate Records

    Accurate record-keeping is essential for tracking contributions and plan values. Many small businesses work with a contract administrator or financial institution to simplify this process and ensure ongoing compliance.

    Step 6: Inform Your Employees

    Provide employees with a summary plan description (SPD) that explains the plan’s benefits, rights, and features. Keep employees updated on investments and any plan changes. Transparent communication helps employees make informed decisions about their retirement savings.

    Step 7: Monitor And Maintain The Plan

    Regularly review your 401(k) plan to ensure it continues to meet your business and employees’ needs. A reliable provider can assist with compliance checks, manage reporting requirements, and help maximize the plan’s value.

    Tax Benefits Of Setting Up A 401(k) Plan

    Establishing a 401(k) plan offers several tax advantages for your business including:

    • Startup tax credits: As mentioned above, small businesses with up to 50 employees may qualify for a tax credit covering 100% of startup costs, up to $5,000 per year for the first three years. Medium-sized businesses (51-100 employees) are eligible for a 50% credit on administrative costs, capped at $5,000 annually for three years.
    • Employer contribution credit: The SECURE Act 2.0 introduced a credit that allows small businesses to receive up to $1,000 per employee in employer contribution credits. This amount phases out gradually over five years, providing 100% credit in the first two years, 75% in the third year, 50% in the fourth year, and 25% in the fifth year.
    • Employer contribution deduction: Employers can deduct contributions up to 25% of eligible employees’ compensation, directly reducing federal tax liability.
    • Pre-tax deferrals for employees: Contributions reduce taxable income for the employer and employees, as pre-tax contributions defer taxes until funds are withdrawn, potentially lowering employees’ tax bills in retirement.

    Setting Up Your 401(k) With Ease

    Establishing a 401(k) plan may seem complex, but the right partner can make the process straightforward and manageable. A professional employer organization (PEO) like Group Management Services (GMS) simplifies 401(k) administration, offering expertise in plan selection, compliance, and ongoing management. Let GMS help you build a retirement plan that benefits your employees and strengthens your business.

    Ready to get started? Contact GMS today to explore how we can help you set up a 401(k) plan best suited for your business.

  • In today’s unpredictable U.S. health care landscape, businesses are struggling more than ever to provide competitive health benefits while controlling rising costs. Next year, U.S. employers project a 9% increase in health care plan costs – 2.6% higher than last year’s budget increases. Each employee covered by company health plans will cost $16,000 annually. 

    Small and midsize businesses (SMBs) are finding it particularly daunting to offer competitive health care plans compared to their larger competitors. A single hospital claim can cost a company over $100,000. Employers struggling with these rising costs often look for assistance from external organizations specialized in fighting claims and managing benefits administration. 

    Continue reading to discover key strategies that can help your business manage its health care costs and optimize employee benefits for the coming year. 

    What Type Of Medical Insurance Does My Business Need? 

    There are two primary types of medical insurance: 

    Fully funded 

    • This is the most common option, where insurance rates are set based on factors such as age, gender, and location. 
    • While easy to manage, businesses have little insight into how their plan is performing – such as how well the plan controls costs, processes claims, and manages employee health care usage. 

    Level funded 

    • This option provides greater transparency, as it’s based on the health of the group, size of the company, and expected usage. 
    • This gives SMBs a better understanding of their plan’s performance and predict renewal costs. 
    • However, it can be more unpredictable, especially for smaller groups, because they’re tied to the group’s health and claims history. A single high-cost claim can cause unpredictable spikes in renewal premiums, making budgeting less stable compared to fixed premium plans. 

    Given these options, businesses should ask critical questions when selecting a health insurance partner. SMBs need to consider factors beyond the deductible, such as copayments and the maximum out-of-pocket costs.

    Catastrophic Claims 

    Catastrophic claims, where serious injuries result in permanently preventing an employee from working, now account for over 20% of cost increases. Without proper audits and cost-control initiatives, SMBs are at the mercy of health care providers.  

    Measures that can have a positive impact on cost savings include: 

    Case management 

    • Health care professionals coordinate complex care for employees to ensure they receive appropriate treatment, helping avoid unnecessary services and reducing overall costs. 

    Disease management 

    • Employers can reduce expenses associated with emergency medical care by offering guidance and resources to support employees with chronic conditions. 

    Nurse advice lines 

    Claim audits 

    • Reviewing medical bills ensures accuracy and helps catch errors or overcharges. 

    Rising Cost Of GLP-1 Drugs 

    A major driver behind the increase in prescription drug costs is the rising demand in Glucagon-Like Peptide-1 (GLP-1) drugs, such as Ozempic, Wegovy, and Trulicity. Commonly prescribed to treat diabetes and obesity, GLP-1 drugs are responsible for over 75% of the increase in costs. These medications, ranging from $1,000 to $1,500 per month, can quickly strain an employer’s budget. 

    Providing employees access to more affordable services like telehealth, coaching, or gym membership reimbursements also allows you to support their healthy lifestyle change without breaking the bank. 

    Medical Provider Costs 

    “Your worst-case scenario is what you need to plan for,” -GMS’ Benefits Sales Manager, Claire McCarus 

    To combat these rising costs, SMBs should design a plan that includes: 

    Dependent eligibility audits 

    • A process that reviews and verifies that all dependents enrolled in a company’s health plan meet eligibility requirements. 

    High deductible health plans (HDHP) 

    • Insurance plans that offer lower premiums but require employees to meet higher deductibles, meaning they must pay more out-of-pocket costs before full coverage begins. 

    Spousal surcharges 

    • Additional fees are charged when an employee’s spouse has access to their own employer-sponsored health insurance but chooses to remain under the employee’s plan. 

    Formulary changes 

    • Adjustments to the list of prescription drugs covered by a health plan, aimed at promoting cost-effective medications and managing rising drug expenses. 

    At Group Management Services (GMS), we offer highly competitive health care plans that help business owners effectively manage rising health care costs. On average, our plans are 26% lower for individuals and 15% lower for families compared to the U.S. market. 

    What About Ancillary Benefits? 

    Ancillary benefits, such as dental, vision, life insurance, and disability, are an affordable way to enhance your benefits package without the high cost of medical insurance. Offering these supplementary benefits can also boost employee satisfaction and retention at a lower cost. 

    Partner With GMS 

    Managing your company’s health care plan is stressful and expensive, especially for smaller businesses. As health care costs continue to increase, you’ll want to start looking for ways to cut down on claims and prescription drugs and reorganize suitable medical plans for your business. 

    If all of this sounds daunting – don’t worry. There are companies with the sole purpose of helping you manage the backend complexities that come with running a business. Outsourcing to a partner like GMS can simplify the administrative burden, providing a dedicated team to handle employee inquiries, manage claims, and even oversee the Consolidated Omnibus Budget Reconciliation Act (COBRA) administration.  

    This support helps ensure nothing falls through the cracks, enabling employers to focus on their business rather than the complexities of benefits administration. Contact us here so we can help your business reduce avoidable expenses and alleviate the stress associated with managing employee benefits. 

  • In 2025, more than 72.5 million Americans will see a change in their Social Security and Supplemental Security Income (SSI) benefits due to a 2.5% cost-of-living adjustment (COLA). This change, announced by the Social Security Administration (SSA), aims to help retirees and SSI recipients to keep pace with rising costs. While the adjustment isn’t as significant as the 3.2% increase in 2024, it is still a crucial step toward maintaining the financial stability of millions of Americans, especially in a fluctuating economy. 

    What Does The 2025 COLA Mean For Social Security Beneficiaries? 

    For Social Security beneficiaries, the 2.5% COLA will result in an average monthly benefit increase of about $50, starting in January 2025. Meanwhile, SSI recipients will begin receiving increased payments on December 31, 2024. This boost is part of the SSA’s annual adjustment process, which ties COLA to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), ensuring benefits adjust with inflation. 

    In addition to the benefit increase, the taxable maximum (the maximum amount of earnings subject to Social Security tax) will rise from $168,600 to $176,100. This means higher-income earners will contribute more to Social Security in 2025. 

    The earnings limit for individuals who have not yet reached full retirement age will increase, allowing them to earn up to $23,400 before benefits are reduced. For those reaching full retirement age in 2025, the limit rises to $62,160. There are no earning limits for individuals at or above full retirement age, which provides greater flexibility for those continuing to work. 

    Simplified Communication For Beneficiaries 

    One key improvement in 2025 is the SSA’s redesign of the COLA notice. Beneficiaries will now receive a simplified, one-page document with personalized information about their benefit changes, making it easier to understand their new payment amounts and any applicable deductions. Beneficiaries with a “My Social Security” account can access this information online before receiving the mailed notice, providing quicker access to critical updates. 

    These changes reflect the SSA’s ongoing effort to streamline communication and improve the user experience, making it easier for beneficiaries to manage their benefits. 

    What Employers Need to Know 

    For businesses, particularly those managing payroll for employees receiving Social Security benefits, these changes require adjustments in payroll processes. The increase in the taxable maximum and changes to the earnings limits will impact payroll deductions and reporting requirements. Employers must stay informed about these changes to avoid compliance issues and ensure that deductions and withholdings are handled correctly. 

    Additionally, businesses should be aware that employees who are nearing full retirement age may adjust their working hours or earnings to avoid benefit reductions, affecting workforce planning and productivity. Employers who offer benefits that coordinate with Social Security, such as pension plans or retirement savings programs, may also need to update their offerings to align with the new COLA. 

    Partner With GMS 

    In a financial landscape that is constantly changing, businesses need a strategic partner to help navigate the complexities of payroll management, tax compliance, and regulatory changes like the Social Security COLA. As a professional employer organization (PEO), GMS provides the expertise and support needed to optimize payroll processes and ensure compliance with these updates. By partnering with GMS, businesses can focus on their core operations while we manage the administrative burdens, ensuring that both employers and employees benefit from financial stability. 

    Let GMS be your trusted partner in staying compliant and navigating the ever-changing world of payroll and benefits. Contact us today to learn more about how we can support your business through 2025 and beyond. 

  • Many working parents in California need time off to manage school-related activities or care for their sick children throughout the year. For employers, understanding the state’s leave entitlements is critical to maintaining compliance while supporting employees’ work-life balance. Continue reading for an overview of key California leave laws for parents and caregivers that businesses should consider. 

    Supporting Involvement In Education 

    The Family-School Partnership Act requires employers with 25 or more employees at a single location to provide eligible employees with up to 40 hours of unpaid leave each year to participate in their children’s school activities. Eligible employees include parents, guardians, and grandparents who have custody of children in grades K-12 or those attending licensed daycare facilities. 

    This leave can be used for activities such as school meetings, field trips, or parent-teacher conferences. However, it is important for employers to note that this leave is capped at eight hours per month, and employees may be required to use accrued vacation or paid time off (PTO) before taking unpaid leave. Additionally, employers can request that employees provide reasonable advance notice when taking leave for school-related activities. 

    Protecting Parent Involvement 

    Under California Labor Code Section 230.7, employers are prohibited from discriminating against or terminating employees who need time off to attend school meetings related to their child’s suspension or expulsion. In these situations, parents and guardians have a right to be present under California Education Code Section 48900.1. Employers must ensure their policies do not penalize employees for fulfilling their responsibilities as parents in these difficult circumstances. 

    Caring For Sick Children 

    When cold and flu season hits, parents often need time off to care for their sick children. California’s Paid Sick Leave law allows employees to use their accrued sick time for their own health needs or to care for a sick family member, including children. This can include time off for preventive care, diagnosis, or treatment. 

    As of January 1, 2024, the minimum mandated paid sick leave increased to five days or 40 hours per year. Employers should ensure they are meeting this requirement and be mindful of any additional local sick leave ordinances that may apply. Many cities and counties in California have their own sick leave laws that may be more generous than the state standard. 

    Best Practices For Employers 

    To create a supportive and compliant workplace, it’s important for employers to: 

    1. Review and update leave policies: Ensure that leave policies comply with state and local laws, including updates to the minimum paid sick leave.
    2. Communicate clearly with employees: Make sure employees are aware of their rights and the procedures for requesting leave. Consider updating employee handbooks to reflect any changes in the law.
    3. Monitor local ordinances: In addition to state laws, California has many local ordinances that may require additional leave or benefits. Keeping track of these changes is essential for maintaining compliance.

    How GMS Can Help 

    Navigating California’s complex employment laws, especially as they relate to family and medical leave, can be challenging. GMS helps businesses stay compliant by offering comprehensive HR services that keep you informed of regulatory changes and ensure your policies meet legal requirements. Whether it’s managing leave entitlements, sick leave policies, or other employment law compliance, GMS is here to guide your business through the intricacies of California labor laws, reducing risk, and helping you focus on your business’s success. Let us take care of the details so you can stay compliant and provide a supportive environment for your employees.