Competitive employers offer their employees a good salary and a good benefits package. It can be difficult for small businesses to attract and keep good employees because larger companies have more resources at their disposal, which can give them an edge.
Fortunately, there are several things that small business owners can do to make their benefits package valuable to current and prospective employees.
What’s the Difference Between Voluntary and Mandatory Benefits?
Mandatory benefits are required by law. Employers are legally obligated by the federal government to pay our Social Security, Medicare, family and medical leave, and workers compensation.
Many of these benefits are cost-shared between the employer and employee. Employees pay Medicare and Social Security taxes from their paycheck. Employers also pay additional taxes for Medicare and Social Security. They are also required to have insurance for workers’ compensation.
Under the Affordable Care Act, employers receive tax penalties for not offering adequate health or dental insurance. Businesses with fewer than 50 employees are not subject to this mandate. However, with the recent tax reform and political changes, the Affordable Care Act’s future is uncertain.
Additional benefits, like disability insurance, may also be required by your state.
Voluntary benefits include health, dental, and life insurance and more. Paying the monthly premiums for each voluntary benefit can be shared between the employer and employee or fully paid by the employee.
For example, some employers offer a set amount of life insurance to their employees. If employees want to purchase additional life insurance, they can purchase more at a discounted rate through their employer.
What goes into a good benefits package?
Putting together a good benefits package that fits your business’s budget takes time and effort. To create a successful benefits package, prioritize your offerings based on what matters most to your employees. There are many benefits that employers can offer their employees. Below are a few of the most common:
Health insurance is the most sought after employee benefit. Health insurance is expensive, especially if you are purchasing it independently.
Employer-provided health insurance is advantageous for employees because the plans tend to be better and the group rate is also comparatively cheaper.
Dental and Orthodontic Insurance
The next benefit that will make your package competitive is dental insurance. Some dental insurance plans cover orthodontic treatment for children, which is especially advantageous for employees with children.
Dental insurance plans can be completely voluntary and paid by the employee or the employer can pay some of the plan’s cost.
Vision insurance is another great offering. Vision insurance typically pays for regular eye exams and subsidizes glasses or contact lenses.
Offering life insurance coverage is another great benefit. Companies can offer some life insurance free of employee contributions. Businesses can also get their employees cheap group rates for voluntary life insurance coverage.
Some life insurance companies, like MetLife, specialize in employer-provided life insurance.
Saving for retirement is an important financial move for everyone. Offering a 401k or Roth IRA match will encourage your employees to save and invest. This benefit is becoming increasingly valuable for workers who are paying attention to what’s going on with Social Security.
Disability insurance pays part of your employees salary or wages if they become unable to work due to an injury or illness. Offering short-term and long-term disability can help you retain good employees.
Many disability insurance companies offer incentives and support to help your employees return to work. Some also offer employers a benefit to help pay for expenses for reasonable accommodations necessary for the workplace.
Yes, pet insurance can be included in a benefits package. While this offering is unique and not important to people who don’t have pets, it can be advantageous for those who do have pets.
How can small business owners find the best rates on benefit plans?
Finding quality benefit plans at affordable rates for your business can be a challenge. It’s also difficult because many insurance companies don’t publish their plans or rates for employers.
This can turn into a lot of phone calls and sales pitches. However, thoroughly researching your options will help you find the best fit and deal for your business.
Luckily, a few companies make this process easier. HealthMarkets and GoHealth help owners find affordable plans to offer employees. These companies show plans from multiple health insurance providers, which makes it much easier to quickly compare plans and rates and find something affordable.
Creating a good benefits plan will make your business a competitive employer and make it easier to retain employees. Take time to think about which benefits will be most valuable to your employees. Researching and comparing options on the benefits you want to offer will help you find good deals and good value for your bottom line and your employees.
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