Why Does StretchDollar Limit to 50 Full-Time Employees?

StretchDollar is purpose-built for small businesses — and the 50 Full-Time Equivalent (FTE) cap is a direct reflection of that focus. Here's why it exists.

It's About Compliance, Not Capacity

Under the ACA, employers with 50 or more FTEs become Applicable Large Employers (ALEs). ALEs face significantly more complex compliance requirements — including mandatory coverage obligations, pay-or-play penalties, and additional IRS reporting (Form 1095-C). StretchDollar specializes in the small group market, where compliance overhead is lower and easier to manage. Serving ALE-size employers would require a fundamentally different (and more expensive) platform.

Simplicity Is a Feature, Not a Limitation

StretchDollar keeps administration simple by design:

• Premium-only reimbursements
• Direct ACH reimbursements to employees
• Simple employer administration
• Minimal ongoing maintenance and compliance overhead

Why Doesn’t StretchDollar Use a Section 125 Cafeteria Plan Model?

Some employers ask why StretchDollar doesn't use a traditional Section 125 cafeteria plan structure, where premiums are deducted through payroll and sent directly to an insurance carrier.

We chose a direct reimbursement model for two primary reasons:

1. More Employee choice – Off-exchange marketplace plans are the only option for section 125 cafeteria plans, and that’s limiting. With ACH transfers, employees can be offered on- or off-exchange plans
2. Straightforward Administration  – Direct bank-to-bank account transfers create a consistent, easy-to-manage experience without the added complexity of payroll deductions, carrier payment workflows, or maintaining separate premium payment arrangements. 

Our goal is to make health benefits accessible to small businesses without introducing unnecessary administrative burden.

The 50 FTE Limit Keeps Costs Low

By focusing exclusively on small businesses, StretchDollar avoids the enterprise infrastructure and compliance tooling that drives up cost for other platforms. That's how we offer straightforward pricing at $100/month — free of enterprise complexity.

Still have questions? Contact the StretchDollar team at support@stretchdollar.com