Offering employee benefits is a necessary part of doing business; it is especially important in competitive job markets. But for many employers, the process of selecting, implementing and administering a benefits program is overwhelming and time consuming. There are over 7.4 million employers in the U.S., and the majority (82%) have fewer than 200 employees (source). Yet as a nation made up largely of small employers, it can be difficult to compete with larger businesses – and larger budgets – for top talent.
There are some basics when it comes to having a competitive employee benefit plan. Some benefits are required by law, while others are pretty much expected by today’s employees. By understanding the various types of benefits your company could offer, you can create the best benefits plan for your employees.
Required employee benefits
1. Unemployment tax
Employers are required to pay federal unemployment tax (FUTA) and state unemployment tax (SUTA). Employees do not pay unemployment taxes. If one of your employees becomes unemployed, they might be able to receive state payments to assist them during their unemployment.
2. Workers’ compensation
Workers’ compensation is a benefit that helps employees with work-related injuries or illnesses. The payments are used to pay for medical expenses and lost wages. Each state has its own regulations.
3. Required leave
Laws require some types of leave. You should give employees sufficient time off to vote. Laws for this kind of leave vary, so make sure to review your state’s laws. Employees should also have time off to serve on a jury. Once again, check your state’s laws. Employees are also entitled to USERRA leave for military service.
Click here to review the typical costs associated with these benefits and more.
Optional employee benefits
1. Health insurance
When most business owners think of employee benefits, health or medical insurance comes to mind first. Remember, the Affordable Care Act established the employer mandate in which employers with 50 or more full-time equivalent (FTE) employees may be subject to a tax penalty if they don’t offer health insurance. But employers with fewer than 50 FTEs are not subject to the mandate. So what’s a small business employer to do? Forego health insurance to save money and risk losing good employees, or offer health benefits and possibly hurt the company’s bottom line? Neither of these options would be good in the long run. But what if there were a way for everyone to win—for employees to get the health coverage they expect and need and for you to better manage your small business health care costs? Click here to find out.
2. Dental & vision insurance
Most employers might assume that if you aren’t going to offer medical insurance, why offer dental and vision? Well, dental and vision can be very valuable to your employees and provided at a low cost.
3. Life, disability & supplemental insurance
Low-cost benefits with high value are life insurance and short- and long-term disability insurance. While many employers offer these as a voluntary benefit paid for out of the employee’s check, you might consider offering them as an employer-paid benefit.
You can download a full list of employee benefits in our Quick Guide for Small Businesses, here.
Customizing a benefits plan to your business
There is no one way to offer workplace benefits; however, it doesn’t have to be complicated or even expensive. Like running payroll and paying taxes, offering benefits is a small business complexity that, once you get it right, can actually help your bottom line. Finding the right partner who is able to create a benefits plan tailored to your company and provides benefits and technology that only large corporations typically have access to opens the door to a wider variety of solutions and lower costs for your business.