Employee benefits are virtually indispensable for employers to attract and retain great employees. A very popular employee perk? A robust, flexible and affordable health plan.
What are employee benefits?
Employee benefits are other kinds of compensation that employers provide to their workforce. Offering health benefits to your employees can play a major role in your overall recruitment and retention strategy. You can attract top talent, improve employee work-life balance and promote a healthy workforce.
How to build a benefits program
As public health and national healthcare policies continue to evolve, you can be sure your employees will continue to view healthcare coverage as an important benefit. "Great benefits mean different things to different people," says Michael Loban, vice president of sales and licensed Health and Benefits agent at Automatic Data Processing Insurance Agency, Inc. (ADPIA®), an affiliate of ADP®. "But a great benefits package should offer a choice of options that fit the needs of the employee and their families."
Therefore, employees will prefer employers who offer health benefits that best address their ongoing concerns and personal needs. It is important that you are prepared for this because healthcare benefits will have a strong impact on your ability to attract new and returning employees while also retaining existing ones.
Likewise, communication is critical. Less than half of employees surveyed feel that their employers communicate effectively about their benefits – leading to dissatisfaction and job searching.
Loban suggests that transparency in this area is a vital tool for employee retention. Discuss with your employees their health benefits on a consistent basis – not just during open enrollment. Listen to how these offerings are impacting their lives and families.
Moreover, when you build or modify your benefits program, keep your employees' thoughts top of mind. Their happiness is essential to your business since more than eight in 10 employees surveyed say that they would stay with their employer if their needs were met.
Leverage the power of partners
According to a , the use of multiple partners or insurance carriers can create greater flexibility regarding which benefits can be offered to employees. For instance, six in 10 businesses report using between two and three carriers for their offerings. A majority of those with more than three carriers also use a benefits administration technology tool to keep their plans organized and streamlined. This allows them to provide health and wellness benefits that go beyond just basic medical insurance.
Similarly, many small business owners – who are usually pinched for time and resources – turn to partners that have access to various insurance companies to offer their employees group life and health insurance benefits. These companies assist in selecting the right plan for an individual business, from high-deductible and cafeteria plans to customized individual plans.
"For smaller employers, partners can often provide added value when exploring plan options and administrative solutions to help effectively manage their benefits package," adds Loban.
Put a "POP" plan in your benefits offering
A Section 125 Premium Only Plan (POP) is a favorite for businesses of all sizes. This kind of IRS-approved "cafeteria" plan allows employees to pay part of their health insurance premiums with pre-tax dollars. Eligible premiums typically include health, dental, vision, disability, and life insurance. For employers, this translates into lower payroll tax expenses and reduced Social Security and Medicare expenses. For employees, there's reduced taxable income and more take-home pay.
Establishing a POP is a creative way to make your benefits plan more competitive – allowing you to create lasting value for your workforce while at the same time generating continuous tax savings for your business and your workforce.
Open enrollment dates
To keep their current plan or choose other options, employees must renew most of their enrollments each year. You want plan options that both you and your employees can afford. Carefully thought-out choices will enable you to add value to every dollar you spend. The best way to achieve this is by exploring different options early on. This way, you'll be in good shape when it comes time for your plan's open enrollment period.
In an ever-changing business landscape, finding the right benefits for your employees is critical.
As Loban concludes, "There's no 'one-size-fits-all' solution. But as costs continue to rise and new opportunities emerge, it's important to offer these benefits because they could give you a competitive advantage in a tight market."
Learn more about health benefits and other business insurance options.
- If your organization has 49 or fewer benefits-eligible employees, visit insurance.adp.com to learn about easier ways to manage your group health benefits.
- If your organization has 50 or more benefits-eligible employees, click here to learn about our benefits administration offering.
Automatic Data Processing Insurance Agency, Inc. (ADPIA) is an affiliate of ADP, Inc. All insurance products will be offered and sold only through ADPIA, its licensed agents or its licensed insurance partners; One ADP Blvd. Roseland, NJ 07068. CA license #0D04044. Licensed in 50 states. Certain services may not be available in all states with all carriers. Some carriers may charge an additional fee for services. This information is not intended as tax or legal advice. If you have any questions, contact a tax or legal professional. ADP and ADPIA are registered trademarks of ADP, Inc. Copyright © 2023 ADP, Inc. All rights reserved.