In the United States, 49% of all employees will leave their jobs in the next year due to a lack of available benefits. The truth is employee wellness benefits are a critical part of overall job satisfaction, and this applies to small businesses too.
If you’re a small business, deciding on the right small business employee benefits can be overwhelming. Learning about the most common small business benefits is the best thing you can do. This way, you can develop a benefits plan that works for your employees and you as a business.
Keep reading this guide to learn about the most common small business employee benefits!
Health Insurance Benefits
One of the most important things you can offer to your employees is access to health benefits. Small businesses with 50 or more full-time employees in the United States qualify as ALEs (Applicable Large Employers) and must offer health benefits. Per the Affordable Care Act, these benefits must be affordable and meet the minimum essential coverage requirements.
If you have less than 50 employees, you’re not required to offer health insurance to your employers. However, this doesn’t mean that you shouldn’t provide health benefits. Health benefits are essential to your business and have many advantages:
- Helps build a healthier workforce
- Helps attract new employees
- Builds positive employee relationships
- It saves you money during tax season
There are different ways you can offer health benefits as a small business, which include:
Group Health Insurance Plans
Most states offer small-group health insurance plans for businesses under 50 employees. You’ll be able to ensure your employees have access to affordable healthcare. They’ll also have the option to choose from different benefit plans.
Many group health insurance plans have short-term and long-term disability insurance, which is an essential part of any insurance package.
Flexible Spending Accounts (FSAs)
FSAs are employer-owned accounts that allow for pretax contributions to an account. Your employees can contribute to this account and enjoy tax savings.
Your employees can use the funds for specific qualified medical expenses like prescriptions and health insurance premiums.
Health Savings Accounts (HSAs)
HSAs give your employees access to pretax funds that can be used for specific medical expenses. With HSAs, the employee and employer can contribute to the fund, and the interest is tax-free.
Employees can use HSA funds for things like:
- Prescription medications
- Weight-loss programs
- Health insurance costs
Health Reimbursement Arrangements (HRAs)
HRAs are becoming more popular for small businesses because they allow for personalized benefits. They’re a budget-friendly way to give benefits to your employees.
With an HRA, you’ll give employees a fixed dollar amount to spend on benefits based on their needs. Unlike HSAs, HRAs are fully funded by employers.
Having an HRA gives your employees a choice of individualized health plans that suit their needs. For example, your employees can buy coverage from a health insurance marketplace.
Fringe Health Benefits
It’s also important to consider adding fringe benefits to your benefits package. Having fringe benefits is a huge perk as you hire employees, and it will strengthen the loyalty of your current employees.
Fringe benefits typically include benefits such as:
- Prescription drugs
- Life insurance
- Pet insurance
- Gym memberships
- Transportation passes
- Paid volunteer days
- Gift cards
Finally, childcare expenses and caring for aging parents can overwhelm your employees. So, consider offering dependent care flexible savings accounts. These accounts allow employees to set aside pretax wages for childcare or other dependent care expenses.
Mental Health and Wellness Benefits
Mental health and wellness are crucial to your employees and the success of your business. Taking care of your employees’ mental health boosts creativity, productivity, and overall physical health.
So don’t forget to make mental health and wellness benefits a significant part of your business plan.
Employee Assistance Programs
You can start by offering an employee assistance program (EAP). These programs give employees 24/7 access to professionals like counselors.
Your employees can work out issues like parenting problems and mental health concerns like anxiety. Many EAPs also offer financial counseling, which can help your employees become financially stable for the future.
Flexible Work Schedules
You should also consider offering flexible work schedules. Flexible work schedules can include four-day work weeks and the ability to work from home. Having this gives your employees time to balance their busy lives and avoid burnout.
Other mental health benefits you can consider include:
- Social events with other employees
- Group health challenges
- Online wellness programs
- Incentives for getting healthier
Remember, offering ways for your employees to stay mentally and physically fit lowers healthcare expenses for you and your employees.
Finally, considering your employees’ financial health is more important than ever. Nowadays, the cost of living is higher than before, and more people feel anxious and stressed trying to make ends meet. This translates to your employees’ work performance, making them less engaged.
A great place to begin is offering a retirement account like a 401(k) plan. With this, your employees can make pretax contributions to the plan. As an employer, you have the option to match their contributions to help them save enough for retirement.
Another area to focus on is annual pay raises. While you may already have annual performance-related raises in place, you should also consider a cost of living raise. This will help your employees deal with inflation and cost of living increases.
Student Loan and Tuition Assistance
Many people who go to college have considerable student loan debt they’re paying off. In addition, many other people are interested in furthering their education but can’t afford it.
As a business, investing in your employees’ education is a wise decision all around. Not only will your employee be more educated, but it will increase the quality of future employees. Anybody from millennials to generation Z will feel you have benefits that can improve their careers.
Regardless of the benefits you choose, it’s a wise idea to consult an accountant with employee benefits tax experience, like the experts at https://templetonco.com/industries/employee-benefit-plan-401k-audits.
This ensures you take advantage of available tax benefits and credits while creating the best benefit plan for your business.
Finding the Best Small Business Employee Benefits
Now that you know more about the most common small business employee benefits, you’ll be better able to create a benefit plan that truly meets the needs of your employees.
Make sure to do your research and consider talking to a financial advisor or an accountant that has experience with business tax laws. This will allow you to offer benefits that give you a tax break at the end of the year.
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