2018-10-05 12:03:35Healthcare and BenefitsEnglishAs a small business owner, you know the value of your employees. But what you may not know is what those employees value. As the market...https://quickbooks.intuit.com/r/us_qrc/uploads/2018/10/Health-Insurance-and-Benefits-for-Small-Businesses_featured.jpghttps://quickbooks.intuit.com/r/healthcare-and-benefits/health-insurance-and-benefits-for-small-businesses/Health Insurance and Benefits for Small Businesses

Health Insurance and Benefits for Small Businesses

6 min read

Small businesses don’t always have the ability to offer the extra perks that larger corporations can.

While companies like Google and Netflix capture headlines with their chef-made daily meals, and 12-month paid parental leave, smaller businesses need to be a little more creative.

Surveys conducted by a variety of companies like Glassdoor and Frac.tl have tracked what employees value most when it comes to benefits. Let’s take a look at some of the most popular and how it might be possible for small businesses to offer competitive benefits to their employees.

First, Let’s Get Health Insurance Requirements Out of the Way

To begin, let’s make sure that any requirements you might be legally obligated to offer are covered. With the passage of the Affordable Care Act (ACA), applicable large employers (ALEs) are required to provide a certain percentage of their full-time employees (FTEs) with what has been called minimum equivalent coverage (MEC). Minimum equivalent coverage is defined as “Marketplace plans, job-based plans, Medicare,” etc. according to Healthcare.gov.

Applicable large employers (ALEs) are employers with 50 or more FTEs that work at least 30 hours per week. If your business meets this requirement then yes, you are required to provide some health insurance to your employees. If you don’t, then you aren’t subject to the employer mandate. Likewise, the Family Medical Leave Act (FMLA) has similar stipulations.

There are a handful of other insurance and benefits that are mandated by law, even for small businesses.

These benefits include:

  • Federal Insurance Contributions Act (FICA): This includes Social Security and Medicare taxes. Employers are required to match the employee withholding contribution for both of these: 6.2% of the employee’s gross compensation for Social Security and 1.45% of the gross compensation for Medicare. (There is an additional 0.9% withholding tax for Medicare that the employee is required to contribute, but not the employer.)
  • Unemployment Insurance: This requirement varies by state, so check with your state’s workforce agency for details.
  • Worker’s Compensation Insurance: Refer to your state’s Worker’s Compensation agency for more information.
  • Disability Insurance: This is a requirement in California, Hawaii, New Jersey, New York, Rhode Island, and Puerto Rico.

What Employees Want From Their Health Insurance and Benefits

After reviewing the Frac.tl survey conducted in 2017, when job seekers are evaluating two or more companies with differing pay, the top five benefits they’re contemplating are:

  • Better Health, Dental and Vision Insurance
  • Flexible Hours
  • More Vacation Time
  • Work-From-Home Options
  • Unlimited Vacation Time

None of these are particularly surprising, especially when you consider health care costs and an increasing desire for work/life balance. The other benefits that rounded out the top ten were:

  • Student Loan Assistance
  • Tuition Assistance
  • Paid Parental Leave
  • Free Gym Membership
  • Free Daycare Services

Considering the increasing costs to attend college and secure a degree, plus the ongoing costs for daycare providers, looking for employer assistance for these monthly expenses is not surprising.

Lastly, with more and more companies looking for ways to boost employee wellness, benefits like gym memberships are increasingly important.

What Kind of Benefits Can Your Small Business Afford?

In the grand scheme of things, all of these benefits seem more than reasonable.

Employees want some assurance from their employer that their health and wellness needs will be met, while also giving them a chance to achieve a balance between work and life.

However, as a small business, what you’re able to offer vs. what they want may constitute a wider divide. So, what can you really offer?

Health Insurance for Small Business

The number of options available to small business owners for health insurance is fairly robust. Take advantage of the government’s SHOP (Small Business Health Options Program) website to see what might work for you.

They even have a call center you can call at 1-800-706-7893 with people who can answer your questions.

Flexible Spending Accounts

While you may find it cost-prohibitive to offer your employees free or discounted daycare, consider offering Flexible Spending Accounts (FSA). These accounts allow employees to withhold a certain pre-tax amount of their salary and place it into an account that can then be used for things like dependent care, health care expenses, and adoption costs.

For more information about FSAs, check out this article.

Paid Leave, Sick Leave and Vacation Time

While it might seem that giving your employees paid time off will affect your bottom line, studies show that not offering them time away from work is worse.

According to an article in Psychology Today, 64% of workers state “that they are refreshed and excited to get back to my job” when returning from a vacation. This type of excitement will boost employee engagement which will have a positive impact on your company’s productivity.

Providing sick time is really a common courtesy, not only to the employee who is sick,but to their coworkers as well.

Asking healthy employees to work next door to someone who is coughing and sneezing all day isn’t the best way to encourage morale. Consider how you feel when a friend refuses to cancel plans, but then continues to sneeze all through dinner. Chances are, you don’t want to be sick too.

Acknowledge that everyone gets sick and allow your employees to take care of themselves so that they can come back to the office ready to go. And hopefully, avoid the phenomenon of the “office cold” that could sink productivity for weeks or months if it starts making the rounds.

Flex Time or Remote Working Options

This is something that’s very much within your control as a small business owner. The benefit of offering flexible scheduling or the ability to work-from-home to your employees can’t be overstated.

There are some small businesses that are even foregoing an office altogether and migrating to a 100% remote workforce.

Think of the cost savings that comes from not having rent, utilities, cleaning or other maintenance bills associated with a physical office space. Even if you provide employees a stipend to set up their remote workstations with all of the tools and supplies they could need, the total costs will still be far less.

A 2-year study conducted by Stanford University found that employees who worked from home take shorter breaks, less sick days, and less time off than their in-office compatriots. It also helps to reduce attrition. One of the study’s designers, Professor Nicholas Bloom, did a TED talk to present his findings. Check it out here.

The fact is with the amount of connectivity available to employees today, including smartphones, high-speed internet, and virtual meeting software, there are few reasons not to allow your employees a chance to work from home.

Obviously, for some industries, it may not be possible, but if it is for yours, it’s something worth considering.

When it comes to employee benefits, the truth is you have to offer what is financially feasible for your small business.You also have to be competitive enough to keep and retain the type of employees you want and need to be a success.

As the economy continues to grow and the business landscape continues to innovate, stable, productive employees will become your greatest asset. Whenever you think about employee benefits, first think about the true value your employees bring to your company. Once you’ve assessed that it’ll be easy to see why offering them solid benefits is more than worth it.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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