For one thing, it spreads the risk across fewer people. So, your rates may be very high, if you can find a carrier interested in your business. You are not legally prohibited from doing this if you can find a carrier interested in your business.
In my opinion, it would be better to offer health insurance, for example, to all employees and pay a set amount toward the cost (say 50 percent of the cost of single coverage). Then, pay exempt employees the amount you wish to in order to offset the remaining cost for their coverage.
You can offer benefits such as life insurance, disability insurance, etc. to only a portion of your workforce.But, again, the rates will be affected by the limited number of individuals being insured.
Penny is a seasoned human resources executive and consultant with over 25 years of diverse business experience in advising enterprise leaders on employment-related matters.