How to Offer Big Benefits at Your New England Small Business

No one ever said running a company was easy. New England small-business owners embrace the challenge, taking on the difficult work of staying afloat in a crowded sea of larger competitors. Just because a business is small doesn’t mean it can’t enjoy some of the advantages only larger competitors seem to have. When it comes to offering robust benefits packages, small businesses are now competing with corporations across the country.

Knowing your options and meeting your employees’ needs can make the difference in building the right team. Here are a few tips for offering big benefits at your New England small business:

The Benefits Employees Expect

A business must continually attract new talent to continue growth, but doing so requires offering a competitive benefits package. Employers first need to identify what their employees want and need and then determine what is available that can meet those needs.

Packages should be focused enough to provide workers with their preferred options but broad enough to allow them to choose a package that best suits their personal goals and lifestyles.

Benefits generally fall into three categories:

• Health Care: The most important benefit that an employer can offer, and the one that  employee’s typically value most. It's so essential that its absence might send otherwise interested applicants looking for work elsewhere. Offering a choice of major medical packages is a small business’s best bet for assuring employees are satisfied with their health options.

• Retirement: The 401k, along with other tax-deferred defined contribution plans, has come within the reach of small businesses that want to help employees save for their later years. Although salary deferment may seem more like a chore than a benefit to many employees, these investment vehicles are part of their compensation packages, and businesses and employees alike have good reason to take full advantage of them.

• Ancillary Benefits: Health care and retirement benefits are important to employees, but other benefits are still a major component of rounding out a great package. Additional benefits such as paid time off, remote work opportunities, tuition assistance, dental and vision care, life insurance and disability insurance all factor into an employee’s decision to accept a position and remain with your company.

Details and Resources for Offering Employee Benefits

Major Medical

Offering a major medical health insurance plan to your employees will help them ensure they meet their health-care necessities. Many plan levels are available, many of which are required to meet certain federal minimums.

Included in this are trips to the doctor's office or emergency room, hospitalization, maternity and newborn services, access to prescription drugs, ambulatory and laboratory services, and other essential health care services including preventive care and rehabilitative devices.

Ancillary Benefits

Also called “side,” “voluntary” or “fringe” benefits, ancillary benefits are as important as health insurance.

One of the major factors in worker retention is the degree to which they believe in their company’s commitment to its employees. Additional group insurance products, helpful claims-handling services, and work programs from which employees receive additional value all contribute to the creation of welcoming and people-focused company culture.

A few types of ancillary benefits include:

• Life Insurance: Life insurance plans pay policyholders upon the death of an insured individual. They come in many sizes and serve just as many purposes, from covering funeral expenses to ensuring decades worth of family expenses. Life insurance is available in two types: 1) Permanent, or “whole,” which is guaranteed to pay out when the insured party passes away, and 2) Term, which provides life insurance for a limited number of years.

• Dental and Vision Insurance: Popular at large companies, dental and vision plans round out the insurances covering likely health expenses. These relatively inexpensive plans are finding their way into the hands of more employees at smaller businesses, which can help to lower costs and offer plan maintenance to employees.

• Employee Assistance Programs: Workplace benefits can be more than just insurance. Employers who are committed to the overall health and well-being of their people often provide subsidized access to counseling.

• Disability Insurance: A must for anyone who can’t afford to go several weeks without pay, disability insurance keeps workers afloat when a non-work-related illness or injury keeps them from earning a wage.

401(k) Programs

The most popular of all retirement plans, a traditional 401(k) not only provides an easy way to set aside tax-free dollars into bonds and equities, but also offers business owners and managers the opportunity to make low-risk investments while providing a crucial benefit to employees.

The 401(k) plan is flexible and incentivizes employers to increase their level of involvement. Depending on its investment needs, a business can choose to make contributions for all participants, match employee contributions up to a certain amount, or do both or neither.

No matter how an employer chooses to structure its 401(k) program, investors stand to benefit. From a benefits perspective, however, giving employees more opportunities to invest in their own retirement can go a long way in attracting and retaining top talent.

Funding Your Benefits

Employers have three options when it comes to funding benefits:

• Employer Funded, Fully Insured: In employer funded plans, the business owner pays a majority of the premium, while the carrier assumes payment of the claims. In most instances, there is typically a significant discount in pricing if the employer funds 100-percent of the premium.

• Partially-Funded, Administrative Services Only: The employer and employee share the cost, with the employer generally covering 80-percent. Administrative costs are paid by the employer based on claims activity 

• Employee-Funded, 100-Percent Paid by Employees: The employees cover the entire cost of the plan. Pricing is typically higher, and the coverage less expansive in this plan, but the cost to the employer is limited to administrative expenses.

Government-Mandated Employee Benefits

Required by law to provide several benefits to employees:

• Social Security: Employers must pay into Social Security at the same rate as their employees.
• Workers’ Compensation: Businesses must carry workers’ compensation insurance through either a commercial carrier or state program.
• Family and Medical Leave Act (FMLA): Most leave-related benefits (vacations, paid holidays, etc.) aren't mandated by federal or state law. FMLA, however, requires employers to offer up to 12 weeks of unpaid, job-protected leave during a 12-month period. Qualifying reasons include:
• Maternity or paternity leave so that an employee may be at a birth of or provide care for a child or tend to an adoption.
• Providing care to an immediate family member suffering from a serious health condition.
• Caring for an employee's own serious health condition.
• COBRA Assistance: The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires that retirees, qualified former employees, spouses, former spouses and dependent children of employees continue receiving lower rates on health insurance after their relationship with an organization receiving a group rate comes to an end.
• Companies with more than 20 full-time employees are required by law to offer COBRA coverage and notify employees of its availability. Although rates do not, technically, rise for those with a COBRA plan, they must pay the entire premium themselves, including the portion formerly paid by the employer.

FMLA applies to all public employers and private employers with 50 or more employees. All group health benefits offered to employees must continue in full for the duration of the leave.