If you want to hire high-quality workers, you must provide decent benefits. Benefits can be expensive — often making up 30 to 40 percent of an employee’s costs — but good workers will demand good benefits.
In 2009, 76 percent of employers with three to 24 workers offered health benefits, according to the Kaiser Family Foundation. That number increases to 92 percent when considering businesses with between 24 and 49 employees. Your type of business will likely determine how necessary health insurance is. For example, it may be less important for an independent retail store that hires many high school or college students to offer health benefits, than a small, high-tech firm that would have difficulty attracting high-quality candidates.
Benefits can include:
- Health insurance
- Vision care
- Life insurance
- Paid holidays
- Vacation pay
- Employee stock ownership plan
- Retirement benefits
- Dental insurance
- Short- and long-term disability
- Accidental death and dismemberment
- Tuition reimbursement
- Health-care spending account
- Employee assistance program
Each type of insurance includes a variety of services and payment options. Plans can be different based on deductibles, co-payments and maximum payouts. The size of your business and the number of employees enrolled in the plan will be determining factors in the benefits you can afford to offer and contributions you can make to offset employee costs.
To help sort through the options, order the importance of potential benefits you can provide. Determine which ones you can afford and consult a benefit plan administrator. Make sure that benefits carriers have data to back up their performance claims. Look for carriers who provide performance guarantees in areas of claim accuracy, turnaround time, customer service and cost management.
Many companies these days are offering employee perks that go beyond traditional benefits. These perks don’t always cost a lot of money, but can go a long way to help keep employees.
Perks you can offer include:
- Flexible schedules. Employees are demanding a better work-life balance. Parents will be especially pleased with flexible work schedules.
- Telecommuting. If your type of business allows it, many workers are interested in telecommuting, even if it’s only a day or two a week.
- Mentoring or training programs. Workers want professional development. Spend some time and money on work-force development programs to encourage workers to grow at your company.
- Time off for volunteering. Employees are conscientious and want to help others. Prove you’re dedicated to volunteer work by offering time off or by organizing community service projects through your business.
Choosing a health plan
The search for the right health insurance plan can be daunting. Following these tips to ensure you find the best fit for your company.
- Know the lingo. The terms are enough to make anyone dizzy: premiums, co-payments, co-insurance, PPO, HMO, HSA, FSA. You need to understand the intricacies of health insurance to choose the right plan.
- Do your research. Compare a variety of plans and ask a lot of questions. Ask each company how much their premiums have risen in the past five years. Don’t be afraid to negotiate with companies. The Virginia Association of Health Plans can provide more information on managed health-care providers in Virginia. Visit the association’s Web site at http://www.vahp.org.
- Consider outside help. You might want to consult a health insurance agent who specializes in small businesses.
- Understand your employees’ needs. Your health-care coverage will likely affect the plan you’ve chosen. Do you have many young employees who don’t go to the doctor as often? Are many of them covered under other plans?
- Annual out-of-pocket maximums: The maximum amount your employees will pay toward eligible medical/dental expenses in a calendar year.
- Co-payments and co-insurance: Employee’s share of health care/dental care services.
- Deductibles: The amount employees pay before the plan pays its share of expenses.
- Flexible spending accounts: Account where employees can contribute a predetermined amount to use for qualified out-of-pocket medical expenses. Money is drawn from paychecks before taxes, but unused money is lost at the end of the year.
- Health Savings Accounts: Accounts that must be coupled with high-deductible health plans. Pre-tax contributions can be made by employers and employees, and money must be spent on qualified medical expenses. Money rolls over year to year.
- Lifetime maximum: The maximum benefit paid under the benefits plan.
- Network: The group of physicians, dentists, hospitals and other health-care providers that offer care for prenegotiated rates.
- Prescription drugs: Medications prescribed by a physician for the treatment of an illness or injury. There are name brand drugs and generic drugs.
- Urgent care: A sudden onset of symptoms that require immediate medical attention.
- Waiting period: The time your employees must work at your business before becoming eligible for benefits.
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