Government Contractor FAQ – Questions and Answers

Government Contractor FAQ – Questions and Answers

  1. 1.     What is the best way to comply with the health and welfare fringe dollars requirement in government contracts?

By implementing a specially designed “bona fide” fringe benefit plan which meets, but does not exceed, the health and welfare dollars in your contracts, you can provide high quality benefits fully compliant with DBA, SCA, AbilityOne and ACA regulations and fully administered for you at no cost to your company and employees, including Davis Bacon 401K, SUB plan, Bona fide HRA MasterCard, and complete traditional core and ancillary insurance plans with nationwide coverage’s.  These programs will also improve your company’s cost efficiency that will give you a competitive advantage during contract renewal negotiations.


  1. 2.     How can providing benefits be free to my company and employees and save my company money?

Health and welfare fringe dollar allocations in government contracts are earmarked for actual benefits and designed to provide “bona fide” benefits at no expense to your company or employees.  When Health and Welfare dollars are paid to bona fide benefit plans, you provide valuable benefits entirely at the government’s expense.  Since such plans are made on a before tax basis and are not part of your company’s payroll, you legally avoid wasting payroll dollars equaling thousands of dollars in unnecessary payroll related taxes and expenses.


  1. 3.     Can my company pay the health and welfare in the check as cash instead of benefits?

The spirit and intention of the health and welfare allocation in government contracts is to provide bona fide pre tax benefits to government contract workers free of cost to the contractor and employees.  It is to allow the contractor to install a health and welfare program with mandatory participation and level the playing field between union and non-union contractors.


  1. 4.      What advantages does a government contractor realize when working with an expert prevailing wage Third party administrator (TPA)?

TPA will manage a full suite of benefits that fit precisely the H&W dollars in contract and keep the contractor compliant with Davis Bacon Act, Service Contract Act, Ability One, etc.  The TPA will allow the contractor to make one payment to TPA which pays all of the insurance carriers.  TPA will manage all Cobra & HIPAA compliance.  Facilitates and simplifies reporting and tracking costs associated with government contract to awarding agency.


  1. 5.     Will program help our company stay compliant with Obamacare (PPACA) regulations and protect our company from being fined potential $2-3000 per worker?

All of our health plans have nationwide coverage and will pass the Actuarial Value standards and the affordability testing.  With these plans, your company will avoid all penalties that are part of the Federal health reform PPACA.  We will continue to monitor and give ongoing guidance as this law evolves over the years.  Our solution will provide a simple and effective program for you to reduce administration concerns.