Employee Benefit Options for Small Businesses

We hear it all the time from small business owners: “I’m losing employees because I don’t provide benefits,” or “when I try to hire someone, the first question they have is what benefits do you offer.” The unemployment rate in Lancaster County was 2.9% in August and the Nebraska statewide rate was 3.1%. In a tight job market like this, employees can easily be lured away by the opportunity for better benefits. So, what is an employer to do?

Here are some ideas to consider:

Having an employee benefits package is an investment in your company. The return on this investment is measured by the quality and satisfaction of your staff. Offering benefits is one way that you let your employees know that you value them and want to provide for them. Just like needing a piece of equipment, you need a good benefits package to motivate your employees.

• Offering an employee benefit package, even a very basic plan, causes employees to think twice before leaving their job.
• If you are able to offer an enhanced benefits package, it will help in the recruitment of new employees. How many times have you heard “What benefits are you offering?” Medical plans are a beginning. You can add ancillary coverages like dental, vision, life, accident plans, long- and short-term disability. Even if these benefits are on a voluntary enrollment, employees like to have options. As an example, you could offer your employees a quality vision plan for less than $10 per month per employee.
• If the cost for medical coverage is beyond your budget, then consider creating a benefits platform where the employer provides a specific dollar amount for each employee and offers a variety of ancillary benefits where the employee gets to decide how to spend the money.
• Another option where the employer can control the costs is to offer a Health Reimbursement Account that is designed to reimburse an employee for out-of-pocket medical expenses that his family incurs up to a maximum amount each year.
• A Section 125 Premium Only Plan (POP) can be incorporated with your employee benefit plans. This allows the employee portion of premiums to be paid with “pre-tax dollars.” It reduces income taxes for the employee and increases take home pay. It also reduces the employer’s payroll tax liability. The POP plan can be added for as little as $100 cost to the employer.

Please give us a call if you have any questions about how your business could implement or change your employee benefits plans.

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