How to Provide Benefits to Employees. Benefits help to attract and maintain top tier employees. They also improve employee morale. Since employers themselves are included in these programs they also derive benefits. Companies often times accrue significant tax advantages by supplying benefits programs, as well, so everyone can win.
Commit to Provide Benefits to Employees
Start with a basic benefits package. The most requested benefits are health and dental insurance. Optical insurance is also highly valued.
Research benefits offered through associations and trade groups. Small businesses with limited resources may be able to band together with other small businesses to buy benefits less expensively.
Poll your employees about the benefits they most desire.
Hire a consultant to find coverage for you.
Negotiate with benefits providers directly.
Prepare an informational package to send out for bids. No matter which avenue you choose when looking for benefits, everyone who makes an offer on your coverage will need the same information about your employee pool: age, gender, marital status, full name and types of coverage needed.
Investigate Flexible Spending Accounts (FSA) as one method of reducing costs for your employees. FSAs allow employees to pay for many of their benefits pre-tax, which puts more of their paychecks in their pockets.
Think about self insurance. Insuring your own employees is an option and can be less expensive.
Offer life insurance to your employees. Life insurance ranks high on the scale of wanted benefits. Many benefits providers include life insurance at a low cost when it is bought as a bundle of services. As a result, companies find that this is often a benefit they can offer at no cost to their employees.
Provide supplemental disability insurance as a benefit. Disability insurance pays a percentage of an employee's wages should the person not be able to work due to a non-work injury. Short term disability applies to work outages of fewer than 6 months. Long term disability pays benefits to employees unable to work for more than 6 months.
Select a retirement plan. Very few companies offer true retirement plans anymore. 401(k) plans have largely replaced the old pension and defined benefits plans. Employers will pay to set up and administer these plans and they may also make matching contributions.
There are a variety of federal and state mandated benefits programs in which companies must participate. You must allow an employee time off to vote, to serve on a jury and to complete military service. Companies must also provide workers compensation insurance, make matching contributions to Federal Insurance Contribution Act (FICA) and fully support the Federal Unemployment Tax Act (FUTA). Some states also require companies to contribute to state disability insurance funds.
Anticipate increases in your insurance expenses at least once a year if not more often. Some companies plan for double digit increases annually.