How Big Should My Business Be To Offer Group Benefits?
If you want to source and retain top talent, an attractive employee group benefits package is a valuable asset. Even with a startup or a small company, it works to your advantage to offer as many group benefits as you can, as soon as you can. Start offering group benefits before it becomes difficult to attract and retain the best employees.
What Group Benefits Should Your Business Offer Employees?
Your group benefits package may be as important as base salary if you want to remain competitive with other employers. Eventually, your employees will expect a high-value package that includes health insurance, dental insurance, a 401(k), and other benefits. Health insurance is one of the costlier benefits for employers to provide.
Low-Cost Employee Benefits & Perks
If you are just starting, you might consider offering employees equity in the company. This allows them to share in the goals of the business and can help build team morale. Other relatively low-cost perks and benefits to consider may include:
Option to work remotely from home
Subsidized training (seminars, conferences, etc.)
Additional vacation time
Health Insurance Requirements Under The Affordable Care Act
When your business has grown to the level of 50 employees or more, you are required under the Affordable Care Act (ACA) to offer adequate and affordable health insurance to your full-time employees and their dependents, or make “employer shared responsibility” payments to the IRS. These payments can be substantial — $2,000 or more for each full-time employee (with the first 30 excluded from the calculation).
Tax Credits For Small Businesses That Offer Group Health Insurance
If, on the other hand, you have fewer than 50 full-time employees, you may be eligible for the Small Business Health Care Tax Credit. To qualify, you must offer a group health plan through a Small Business Health Options Program Marketplace (with limited exceptions) and pay at least 50% of the cost of your employees’ health coverage. The maximum tax credit you can receive as a small business employer is 50% of premiums paid. If your business is eligible, this credit is available for two consecutive years.
Options For Health Benefits To Offer Your Employees
A group health insurance plan provides your employees and their dependents with medical care. A more affordable health benefit option is a defined contribution health plan. This is not health insurance. Under this type of program, each employee has a fixed amount to spend on health care. Employees are responsible for selecting and purchasing their own individual health insurance plans but can be reimbursed for their costs from the defined contribution plan. Contributions to this type of plan are tax-deductible for employers, and employee reimbursements are tax-free.
Other health benefit options include a Health Savings Account (with a high-deductible health plan), which allows employees to use pretax money to pay for qualified medical expenses, or a Flexible Spending Account (FSA), an employer-sponsored account into which employees can contribute pretax dollars to cover healthcare costs. Our knowledgeable agent can help you determine what group benefits to offer your employees at any stage in the lifecycle of your business.
It’s the perfect time to remind ourselves to plan ahead for the ones we love.