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Posted by: Altura Benefits in Insurance
If you want to attract top talent, retain your best workers and boost employee engagement, it’s time to add employee benefits to your total compensation package. For small and mid-size companies that have never offered benefits before, it can seem like a daunting prospect. However, once you know the basics of how to offer employee benefits – and how to get broker support for your benefits rollout – you’ll see that it doesn’t have to be difficult for you or your employees.
Employers are typically required to provide workers’ compensation and unemployment insurance. They also have to pay Social Security and Medicare taxes for their employees. Additionally, companies that have at least 50 full-time equivalent employees are subject to the employer shared responsibility provisions of the Affordable Care Act.
Some companies may be required to offer additional benefits under federal and state laws, but for small to mid-size employers, things like health insurance, life insurance and dental coverage are typically optional.
This doesn’t mean you shouldn’t offer an employee benefits program.
Think about it this way – you’re competing against larger employers, and many of them are offering benefits. If you want to attract the best workers, you need to step up your game. Adding benefits to your compensation package can also make more financial sense than increasing salary and wages. That’s because some employee benefits come with tax advantages. The U.S. Chamber of Commerce has a list of employee benefits that can be tax deductible for small businesses.
No matter how great your company is, some workers simply won’t consider working for you if you don’t offer benefits.
A Glassdoor survey found that 60% of respondents say they give perks and benefits strong consideration before accepting a job, and 80% prefer additional benefits over a larger salary.
Benefits can provide an immense value. They also help alleviate common problems that most workers face. Instead of worrying about how they’re going to pay their family’s medical bills or what they’ll do if they get sick and can’t work, employees can focus on their jobs, knowing that they have the protection and coverage they need from their health insurance, disability insurance and other employee benefits.
Employers typically hold open enrollment in the fall, and the benefit elections go into effect starting in January. However, this doesn’t mean you should wait until fall to think about benefits. You need to give yourself time to put together a benefits package and create an open enrollment plan. If you’re considering offering worker benefits, there’s no time like the present to get the ball rolling.
Health insurance is a major priority for many workers. In fact, according to Gallup, one in six U.S. workers with job-based health insurance say their health benefits are the reason they’re staying in a job they might otherwise want to quit.
Not all health plans are the same, however. HMOs and PPOs are two common plan types. High-deductible health plans are another common option, and one that might be especially appealing to workers looking for a low-premium option. Because different workers have diverse needs, you should consider providing at least two options.
You also might want to pair the health insurance plan with a health savings account (HSA) or flexible spending account (FSA). These savings accounts give workers a tax-advantaged way to save for out-of-pocket healthcare costs.
Health insurance might be the most important employee benefit, but it’s not the only benefit that matters. Dental insurance, vision insurance, disability insurance and life insurance are all popular employee benefits that your workers may expect in a benefits package. Other benefits, like pet insurance and critical illness insurance, can also be attractive to many workers.
If you’re starting to worry about the cost of all these benefits, you can take a deep breath. Employers can make contributions toward voluntary benefits, but they can also have employees pay 100% of the premium cost via payroll deductions. In this way, employers can offer a wide range of benefits without going over budget, and employees benefit from discounted group rates and convenient enrollment.
Speaking of convenient enrollment…
Employees generally want benefits, but they still tend to struggle with the open enrollment process. According to International Foundation of Employee Benefit Plans, around 15% of employees have a low or very low understanding of their health benefits, and only 6% have a very high understanding.
Insurance options can be confusing. Employees may get overwhelmed by dense benefits packets. As a result, they may end up putting off enrollment or not enrolling at all. When this happens, the employee doesn’t gain access to benefits – a fact they may come to regret – and the employer doesn’t see the expected increase in employee satisfaction and employee engagement.
Thankfully, digital tools like Employer Navigator make it easy to educate employees on their benefits and help them enroll. With online enrollment tools, employees don’t have to dig through thick packets of materials or perform complicated math to see how much they’ll pay for coverage. Instead, they can use the interactive tools to see how much their payroll deduction will be for different options.
There’s no sense in offering benefits that your workers don’t actually sign up for. When you make enrolment easy for employees, participation increases.
Before you can offer benefits, you need to figure out your budget. When calculating your budget, remember to account for any tax deductions that could offset your expenses. According to the Bureau of Labor Statistics, total hourly compensation for private industry workers came to $38.61 as of March 2022, but only 70.4% of this was in the form of wages and salaries. The other 29.6% came in the form of benefits. Here’s some additional information about how much employers spent on benefits in 2021.
You also need to decide which benefits you want to offer. Think about the needs of your workers. For example, do they want more robust health insurance even if they have to pay more for the monthly premium, or would they prefer a less expensive plan with a high deductible? Which voluntary benefits matter the most to them? Talk to your employees or conduct surveys to see what they want from benefits. Also look at what other employers in your area are offering. These are companies that you’re competing against for talent, so it’s helpful to see how your compensation package stacks up.
You also need to select a provider for your benefits. This may seem daunting, especially when you want to offer multiple types of benefits and may need to work with different carriers. However, an employee benefits broker can help you get quotes from providers and make selections.
The next step is preparing for open enrollment. You need to think about how your employees are going to enroll (i.e., online or via paper forms), when enrollment will take place, and how you’re going to communicate with your employees so they understand their options and don’t miss their deadlines.
Finally, it’s important to make sure your benefits program is fully compliant with the ACA, ERISA, COBRA and other relevant federal, state and local requirements.
Headquartered in Utah, Altura Benefits is your partner in employee benefits. We have the options, experience and technology to help you launch an effective employee benefits program for your business – whether you have one location in Salt Lake or the City of Murray or multiple locations throughout the state or across the country.
If you’ve been thinking about offering benefits, now is a great time to get started. We can help you conduct a needs-based assessment to help you find the benefits that suit your company. When you use our services, you also gain access to an online enrollment tool at no cost.
If you need additional support, we also offer employee benefits compliance services and HR consulting services. Learn more.
Are you a company looking for benefits or an individual seeking insurance? We are here to help. Answer a few questions and we can get you a quote. Get started by filling out the information below.
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