Employee Benefits Packages: Foundational to Workplace Satisfaction
While a competitive salary is an essential part of attracting top talent, in today’s hot hiring market, the employee benefits package is just as important.
More than ever before, employees are being offered robust and interesting job benefits as organizations strive to keep pace with the shifting culture of work today. Historically, offering health insurance and a 401k were the expected aspects of a benefits package. Today, employees are being offered benefits packages that include generous vacation policies and flexible working arrangements.
In this article, we’ll share the most important aspects of an employee benefits package. You’ll learn what to offer in order to fully support your employees from their first day and beyond.
Employee benefits are nothing without health insurance. It’s absolutely essential that an employee benefits package includes health insurance. Today’s health insurance premiums are almost impossible to afford without employer support. Health insurance is easily misunderstood and complex. Let us break down the most important aspects of health insurance.
ACA rules for 50+ FTEs
According to the Affordable Care Act (ACA) when an employer reaches 50 full-time employees, there are specific requirements in terms of benefits.
- Employer Shared Responsibility Provision
This provision states that employers must provide a health insurance option to qualified employees, and if they do not a fee is imposed.
- ACA Reporting
Employers with 50+ FTEs must adhere to new ACA reporting guidelines to the government and IRS.
Types of Insurance Packages Commonly Offered By Employers
- HMOs and PPOs
Preferred Provider Organization (PPO) plans enable members to visit any in-network provider without a referral. PPO members may be required to pay an annual deductible before receiving coverage. The purpose of a PPO is to keep overall costs to a minimum by limiting medical and health services to the medically essential. PPOs usually have higher premiums, but the result is more flexibility when choosing providers either in or out of network.
HMOs or Health Maintenance Organization plans are comprised of a network of healthcare providers and medical centers. HMO members often have a primary doctor that manages most of their care. If members need access to a specialist, they typically must route through a PCP first for a referral. An HMO is usually the least amount of paperwork but offers less flexibility to choose providers.
- CDHP and HSAs
A CDHP is a health insurance plan with a high deductible. When paired with a tax-advantaged HSA (Health Savings Account), the CDHP provides employees with control and accountability for health care costs.
- Flexible Spending Accounts (FSAs)
Healthcare premiums continue to be an astronomical cost. Employers have responded by offering new options to combat the cost of healthcare. The Flexible Spending Account (FSA) is a before-tax account that can be used to offset “unreimbursed” expenses. The FSA has several different varieties including medical, childcare, and even commuter. The overall benefit of an FSA is to help support the rising healthcare premiums for employees and it is a welcome benefit as a pre-tax savings account provides substantial relief.
- Dental Insurance
Dental insurance sounds self-explanatory, however today’s dental insurance benefits are often expanded. The traditional dental benefits include preventative, basic, and major services. Some dental insurances cover orthodontics and aligners.
- Vision Insurance
Vision insurance is another staple piece of an employee benefits package, though it is usually optional. Vision insurance is important as many people either wear glasses or contacts and having the ability to offset the costs of exams and contacts is a valuable benefit.
- Life Insurance
Life insurance is often appreciated as a benefit, especially by those with families and an eye on the future.
- Disability Insurance (short- and long-term)
Disability insurance includes both long-term (LTD) and short-term (STD) insurance. LTD provides financial protection from loss of income as a result of injury, illness, or accident. This is an important benefit as some estimates say that there is a 1 in 5 chance of an employee becoming disabled. STD is a policy that pays employees a part of their salary after they use the entirety of their sick day allotment.
Other Employee Benefits and Perks
- Paid Time Off
This benefit requires no explanation. PTO is a perk that most employees have full awareness of. PTO or vacation days are one of the most sought-after benefits, and the more PTO days – the better. In certain cases, some of today’s employees even favor more PTO days over an increased salary.
- Retirement Plan
An employee retirement plan is a benefit that can include a large variety of components from a 401k to an IRA. A common practice within an employee retirement plan is to offer a 401k contribution “match” which means an employer matches the contribution of the employee, up to a certain percentage. This match incentivizes employees to take advantage of the employer-sponsored 401k option and gives employees a valuable vehicle to save reliably for the future. Other examples of retirement plan features include employee stock options and company shares.
- Tuition Reimbursement
It’s no secret that student loan debt is a national issue. Employers have responded to this common strain by offering tuition reimbursement for employees that aim to advance their careers through achieving additional degrees. Tuition reimbursement for master’s degrees like an MBA is a now-common employee benefit.
- Pension Plan
A pension plan is a long-term payment to employees even after they’ve retired from their role a the company. In the past, an employee pension plan was commonplace. Today it’s more surprising to see employers offering pension plans.
Another rising cost in our country is the cost of childcare. Savvy employers help employees offset the cost of childcare through stipends for daycare and school-related costs. Another benefit employees offer parents is a flexible workday to allow for drop-off and pickup of children, which is highly valued.
- Company Car and Phone
A company car and phone are a few other fringe benefits that employers can offer. Offering a stipend for a phone or car could be very attractive to prospective employees, as those costs are almost always a part of daily life.
Employee Benefits: Know Your Workforce
The best employee benefits package is the package that is the most supportive of your employees. Of course, healthcare benefits are universally important. Beyond the basics, generous vacation and workplace flexibility are now becoming the new expectation as employees value freedom and balance. To piece together the most compelling benefits package, be sure to spend time understanding your workforce and what’s important to them.