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Attract and Retain Good People with Health Benefits

Being strategic about your compensation package offerings can help you build a positive and productive company team.


The end of a calendar year is a good time to reflect on company culture and the things that motivate your team. Wages are a large part of the employee compensation package, but surveys indicate that employees care about other aspects of the compensation package including health insurance, retirement plans and other perks.


Take time before the end of this year to update your business goals and communicate those with your team. Get input from your employees about what motivates them. Do they understand the company mission? Do they have the tools and security to contribute toward the success of the company?


Attracting and retaining employees has become a big topic of conversation in 2021. As we move into a new year, reflect on the things that will help you attract and retain good people. The advantages of adding employee benefits to your compensation packages include:

  • Higher employee productivity

  • Decreased employee turnover

  • Increased positive engagement with your customers because your employees are happy

  • Financial benefits through increased revenue

  • Ability to reduce taxable income for you and your employees

  • Stabilized labor force and a stronger bottom line


Group Health Insurance Basics


Group health insurance is a single policy that covers all eligible employees and sometimes their dependents. Offering health coverage is a major decision for your business and now is the time for employers to consider establishing a group health insurance plan. There is a one-month window each year, from November 15 to December 15, when small group coverage is guaranteed-issue even to small groups. During this one-month period, small employers (under 50 FTE) may set up a group health plan coverage with minimal expense.


The Affordable Care Act requires employers with over 50 Full-time-equivalent employees to provide health insurance coverage. Large groups fall under different rules than small groups and face penalties for not providing coverage for all full-time employees.


If an employer provides health insurance to any full-time employee, the employer must offer coverage to all employees. When you establish a group health insurance plan, you may choose to pay 100% of the premium or you may pay a portion of the insurance premium and require the employee to cover a portion. Here is an example:

Let’s say you choose a Silver HSA plan for your team, and you contribute 80% of the monthly premium for your employee and contribute 0% towards dependents.

Break out for one employee, named Jillian:

  • Monthly health premium for Jillian: $250

  • You pay: $200 (80%) and Jillian pays: $50 (20%)

  • Monthly health premium for Jillian’s family: $750

  • You Pay $0 and Jillian pays $750

Employers must keep in mind that they cannot choose to cover only top level employees by paying their health insurance. You must have a group plan for all employees to participate. If you do want to help cover only certain employee’s health insurance, you must pay those funds as taxable bonuses that the employee may use to pay their own health insurance. This type of arrangement does not contribute to the valuable benefits described above.


Not ready for a group health plan, you pay consider a QSEHRE


Beginning in 2017, small employers may establish a Qualified Small Employer Health Reimbursement Arrangements ("QSEHRA"). A QSEHRA is an arrangement that a small business uses to reimburse its employees' qualified medical expenses. The reimbursement is made after the employee incurs a medical expense and submits documentation. A QSEHRA cannot work in conjunction with a group health insurance plan. A QSEHRA is only used to pay out-of-pocket medical expenses and not health insurance premiums.

To establish a QSEHRA, the employer must be a small employer and not provide a group health insurance plan. Contributions must be funded solely by the employer.

All full-time employees must be eligible for the QSEHRA after a waiting period of no more than 90 days of service. Under a QSEHRA, there is a maximum annual employer reimbursement, which for 2021 is $5,300 for employees only and $10,700 for employees with a family.

 

We partner with Gusto, a payroll and benefits software company, which has excellent options to assist you in making compensation benefit decisions. Adding benefits options is a very easy process. As always, reach out to us if we can answer your questions.


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