The benefit packages that your small business offers are one way to maintain a competitive advantage so you can attract and retain better talent. Managed benefits services are a way to expand your offerings to employees. Benefits outsourcing will help you streamline the administration of benefits, reduce the burden on your HR staff, and ensure compliance. This allows you to focus on growth and employee satisfaction. Here’s a closer look at managed benefits services for small businesses.
Benefits Small Businesses Are Required to Provide
All businesses, regardless of their size, are required to provide certain benefits to their full-time employees. Social Security and Medicare are two examples that are paid for through a federal payroll tax. Workers’ compensation and unemployment insurance are also required.
Other benefits are size-dependent. COBRA insurance coverage, for example, is only required for companies with 20 or more employees. Small businesses are not considered applicable large employers (ALEs), which are required to provide affordable health insurance coverage to all full-time employees. Companies generally need to have 50 or more employees to be considered an ALE.
Benefits Small Businesses Can Offer
Benefits packages are an important strategic tool that can be used to attract and retain the best employees. Benefits can also encourage a healthy workforce and improve employee productivity and morale. Your benefits package is a signal that your company is willing to invest in your employees’ futures.
A typical benefits package will include health insurance, PTO, dental and vision coverage, and a retirement plan. This is on top of the mandatory Social Security and Medicare entitlements. Some companies may also choose to add life insurance and short-term disability insurance. Benefits can be further broken down as follows.
Health Benefits:
- Group health insurance plans – Standard health insurance plans under the Affordable Care Act (ACA).
- Medical flexible spending account (FSA) – An account that employers and employees can contribute to for tax savings; can be used for qualified health events.
- Health reimbursement arrangement (HRA) – This is an account the employer pays into, with tax savings, which employees can access for qualified health events.
- Health savings accounts (HSA) – This is a pre-tax, employee-owned account that can accrue interest and can be accessed for qualified health events.
Financial Benefits:
- Retirement accounts – A typical benefit is a 401(k) account with matching employer funds.
- Annualized pay increases – Annual raises help stave off inflation, in addition to performance-based pay increases.
- Tuition and student loan assistance – Tuition reimbursement helps employees further their education; student loan repayment is very attractive to GenZ and millennial workers.
- Stock options – Allowing employees to invest directly in the company through discounted stock options gives them a personal stake in its success.
Fringe Benefits:
- Dental, vision, and life insurance plans – These are not typical offerings, but can provide peace of mind and assistance to employees.
- Dependent care flexible savings accounts – An account where employees can set aside pretax earnings for qualified childcare or eldercare expenses.
- Paid volunteer days – This benefit lets employees know you care about giving back to the community while giving them a sense of purpose as they’re volunteering.
- Memberships and passes – Gym memberships, passes to public transportation or sporting events, and similar perks help employees enjoy life more when they’re not at the office.
How Managed Benefits Services Can Help
The more types of benefits that you offer to your employees, the more complexity it adds to the system. This can increase the administrative burden on your HR team, which also increases the risk of human error and compliance issues. Managed benefits services from ASAP Payroll can help streamline the process for you.
Benefits outsourcing with us allows you to have all your benefits plans organized in one central location. We simplify the enrollment process for your employees, so they can enroll in the programs they want with ease. Employees are also given full access to all their benefits, which increases engagement and keeps them invested in their careers with your company.
Creating and maintaining benefits packages can be a burdensome addition for HR teams. These usually involve a lot of paperwork and increased chances of human error. Small business benefits administration eliminates all the paperwork and automates employee eligibility for benefits. It saves precious time and reduces errors so that you can focus on growing your small business.
Simplifying HR Tasks with ASAP Payroll
Complex benefits packages create complexity and administrative burdens for your HR staff while increasing the risk of errors. Outsourcing your employee benefits management reduces these burdens. Offering effective benefits packages is the best way to attract and retain top talent in today’s competitive market.
Contact us today to learn how ASAP Payroll’s payroll and benefits services can simplify your business’s benefits administration.
