What is a Section 125 Cafeteria Plan, and does my small business need one?

A Section 125 Plan allows employees to pay for qualified benefits like health or dental insurance using pre-tax dollars. This lowers their taxable income and reduces your payroll tax burden as an employer.

How many employees do I need to qualify for group insurance in Florida?

In Florida, small business group health coverage typically applies to businesses with 2 to 50 full-time equivalent employees.

What is the main difference between fully-insured and level-funded plan structures?

Fully-insured plans charge a fixed monthly rate regardless of claims filed. Level-funded plans charge a baseline fee while placing a portion of the payment into a claims savings account, which can result in money back if claims remain low.

What is the main difference between Medicare Advantage and Medicare Supplement (Medigap)?

Medicare Advantage replaces Original Medicare with a private plan and often includes extra benefits like dental and vision but uses a network of doctors. Medigap works alongside Original Medicare to pay out-of-pocket costs and allows any doctor nationwide who accepts Medicare.

How do I know whether I need Term or Whole Life Insurance?

Term Life Insurance covers a specific period and is typically the most affordable way to protect income during working or parenting years. Whole Life Insurance provides permanent coverage that lasts a lifetime and builds cash value.

Why do I need supplemental insurance if I already have a standard health plan?

Standard health insurance covers medical services, but supplemental plans pay cash benefits directly to the policyholder, which can be used for non-medical expenses like rent, utilities, or groceries during recovery.

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Navigating insurance options can feel overwhelming, but you don’t have to figure it out alone. Explore our frequently asked questions and quick glossary below to get clear, straightforward answers.

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Frequently Asked Questions

Here are answers to the most common questions Panhandle families and business owners ask us every day.

Employee Benefits & Business Coverage

Medical Dental Vision

Life Disability

Supplemental Plan Employee Benefits

Section 125 Plans

Medicare & Retirement Health Plans

Medigap

Medicare Advantage

Plan D

Personal & Family Insurance

Health Insurance

Life Insurance

Supplemental Plans Personal Coverage

Glossary

Clear choices start with clear definitions. Use this quick reference guide to get comfortable with key concepts before making any coverage decisions.

Premium What you pay to keep a policy active, usually monthly. You pay it whether or not you use the coverage.
Deductible The amount you pay out of your own pocket before the plan starts paying its share. A $2,000 deductible means you cover the first $2,000 of eligible costs for the year.
Copay A flat dollar amount you pay for a specific service — say $30 for an office visit. It usually applies whether or not you've met your deductible.
Coinsurance Your percentage of the bill after you've met the deductible. If your plan pays 80%, your coinsurance is the remaining 20%.
Out-of-Pocket Maximum The most you'll pay in a plan year for covered services. Once you hit it, the plan pays 100% of covered costs for the rest of the year. Premiums don't count toward it.
Network The doctors, hospitals, and facilities that have agreed to contracted rates with your insurance company. Staying in-network costs you less. Going out-of-network costs more, and sometimes isn't covered at all.
Claim The request for payment sent to your insurance company after you receive care. Most providers file it for you.
Explanation of Benefits (EOB) The statement your insurer sends after processing a claim. It shows what was billed, what the plan paid, and what you owe. It is not a bill.
Beneficiary The person or people who receive the payout from a life insurance policy. You choose them, and you can change them.
Rider An add-on that changes what a policy covers. Riders can expand coverage, add a benefit, or attach conditions.
Underwriting The insurance company's process for evaluating risk and deciding what to charge you — or whether to issue the policy at all. Some products require health questions or an exam. Others don't.
Independent Agent An agent who isn't tied to a single insurance company and can compare plans across multiple carriers. Captive agents sell one company's products only.

Group Health Plan Health coverage an employer offers to employees. Group rates are typically lower than what an individual would pay on their own, because risk is spread across the whole group.
Employer Contribution The share of the premium the business pays. Most carriers require the employer to cover a minimum percentage of the employee's premium in order to offer a group plan.
Participation Requirement The minimum percentage of eligible employees who have to enroll for the group plan to be issued. Common thresholds sit around 70%, though it varies by carrier.
Open Enrollment The set window each year when employees can join a plan, switch plans, or change coverage levels. Outside that window, changes generally require a qualifying life event.
Qualifying Life Event A change like marriage, divorce, birth, adoption, or loss of other coverage that lets someone enroll or make changes outside of open enrollment. It opens a special enrollment period, usually 30 to 60 days.
Waiting Period The time a new hire has to work before benefits start. Federal rules cap this at 90 days.
Fully Insured vs. Level-Funded Fully insured means the business pays a fixed premium and the carrier takes on all the claims risk. Level-funded means the business pays a steady monthly amount that covers expected claims plus stop-loss protection, with the possibility of money back if claims come in low. Level-funded can save money for a healthy group, but it involves more moving parts.
Ancillary Benefits Coverage that sits alongside the medical plan — dental, vision, life, disability, and similar. Often inexpensive to add and heavily valued by employees.
Section 125 Plan (Cafeteria Plan) An arrangement that lets employees pay their share of premiums with pre-tax dollars. It lowers their taxable income and the employer's payroll tax burden.
Summary of Benefits and Coverage (SBC) A standardized document laying out what a plan covers and what it costs. Every plan has one, and the format is the same across carriers, which makes it the most reliable way to compare options side by side.
COBRA A federal law that lets employees keep group coverage for a limited time after leaving a job. They pay the full premium themselves, so it's usually expensive. Generally applies to employers with 20 or more employees.

Original Medicare Part A and Part B together, administered by the federal government. It covers a lot, but not everything, and it has no cap on what you can spend out of pocket.
Part A — Hospital Insurance Inpatient hospital stays, skilled nursing facility care, hospice, and some home health care. Most people pay no premium for Part A because they paid in through payroll taxes.
Part B — Medical Insurance Doctor visits, outpatient care, preventive services, lab work, and durable medical equipment. Part B has a monthly premium, and higher earners pay more.
Part C — Medicare Advantage A private plan that replaces Original Medicare and bundles Parts A and B, usually with drug coverage and extras like dental or vision. These plans use provider networks and require prior authorization for some services. They also have an annual out-of-pocket cap, which Original Medicare does not.
Part D — Prescription Drug Coverage Standalone drug coverage through a private plan. Advantage plans often include it. If you go without creditable drug coverage, you may owe a penalty later.
Medicare Supplement (Medigap) A private policy that pays the gaps Original Medicare leaves behind — deductibles, coinsurance, and copays. Plans are standardized by letter, so a Plan G is a Plan G no matter which company sells it. Price and service are what differ. You cannot have a Medigap plan and a Medicare Advantage plan at the same time.
Initial Enrollment Period (IEP) Your first chance to sign up: the seven months surrounding your 65th birthday — three before, your birth month, and three after.
Annual Enrollment Period (AEP) October 15 through December 7 each year. This is when you can switch Advantage plans, change Part D plans, or move between Original Medicare and Advantage. Changes take effect January 1.
Guaranteed Issue Rights Windows when a Medigap carrier has to sell you a policy regardless of your health history and can't charge you more for it. Outside those windows, you can be medically underwritten and turned down. This is why the timing of your first enrollment matters so much.
Late Enrollment Penalty A permanent surcharge added to your premium for signing up late without other qualifying coverage. It applies to Part B and Part D, and it doesn't go away.
Formulary The list of drugs a plan covers, grouped into tiers that determine your cost. Formularies change every year, which is why checking your prescriptions each fall is worth the time.
Coverage Gap ("Donut Hole") An older Part D cost structure people still refer to. It has been replaced by an annual cap on what you pay out of pocket for covered prescriptions.

Term Life Insurance Coverage for a set number of years — 10, 20, 30. If you pass away during the term, your beneficiaries receive the death benefit. If the term ends, coverage ends. It's the least expensive way to buy a large amount of protection.
Permanent Life Insurance (Whole Life, Universal Life) Coverage that lasts your entire life as long as premiums are paid, and builds cash value over time. Premiums are significantly higher than term.
Death Benefit The amount paid to your beneficiaries. It's generally income-tax-free to them.
Cash Value The savings component inside a permanent policy. It grows tax-deferred, and you can borrow against it — though loans reduce the death benefit if not repaid.
Guaranteed Issue / Simplified Issue Policies that skip the medical exam. Guaranteed issue asks no health questions at all. Simplified issue asks a few. Both cost more per dollar of coverage and often cap the amount you can buy, but they're an option when health history is a barrier.
Supplemental Insurance Coverage that pays you directly when something specific happens, on top of whatever your health plan pays. The money is yours to use for anything — deductibles, mortgage, groceries, travel.
Accident, Critical Illness, and Hospital Indemnity Plans The three most common supplemental products. Accident plans pay on injury. Critical illness plans pay a lump sum on a covered diagnosis like cancer, heart attack, or stroke. Hospital indemnity plans pay a fixed amount per day of admission.
Disability Insurance Replaces a portion of your income if you can't work due to illness or injury. Short-term covers weeks to months. Long-term covers years, sometimes to retirement age.
Elimination Period The waiting time between when a disability begins and when benefits start paying. Longer elimination periods mean lower premiums.
Long-Term Care Insurance Covers extended help with daily living — nursing home, assisted living, or in-home care. Health insurance and Medicare generally don't pay for this.
Marketplace Plan (ACA Plan) Individual health coverage bought through the federal exchange. Plans are grouped by metal tier, and income-based subsidies can reduce what you pay each month.
Premium Tax Credit (Subsidy) A federal credit that lowers your monthly Marketplace premium based on household income and size. It can be applied up front rather than claimed at tax time.

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Frequently Asked Questions

What is a Section 125 Cafeteria Plan, and does my small business need one?

How many employees do I need to qualify for group insurance in Florida?

Are voluntary benefits worth offering if my business has a tight budget?

Can I offer different plan choices to different types of employees?

What is the main difference between fully-insured and level-funded plan structures?

Is it possible to switch our insurance broker without changing our actual health insurance plans mid-year?

How much do employers have to contribute toward employee premiums?

Can we combine medical, dental, and vision into one plan?

Can I offer voluntary life and disability without paying premiums for my employees?

How many employees do I need to qualify for group life or disability rates?

Are employer-paid life insurance premiums tax-deductible?

Can employees keep their coverage if they leave the company?

Does offering voluntary supplemental plans cost my business anything?

Can employees keep their supplemental policies if they leave the company?

How do employees receive cash payouts from supplemental policies?

How do supplemental plans work alongside existing group health insurance?

Does setting up a Section 125 plan cost my business money?

Which insurance premiums qualify for pre-tax deduction?

Are plan documents required by the IRS?

Can small businesses with few employees set up a plan?

Glossary

Still Have Questions? Talk to a Local Expert.