Building An Employer Benefit Program
The importance of having a high-quality benefit program can’t be overstated.
Salary and benefits are the building blocks of an employer's compensation strategy.
In fact, aside from salary, employees rank benefits packages as one of the top factors they use to evaluate job offers.
With the trend of rising health care costs showing no signs of slowing down, however, finding an affordable way to build a competitive, attractive benefit options has never been more challenging. But how do employers build a competitive benefit program that attracts the kind of high-quality talent they're looking for?
Employer benefit packages typically include the following components:
- Health insurance
- Retirement benefits
- Disability insurance
- Life insurance
- Paid leave (vacation, sick leave, PTO)
- Other optional, additional benefit programs
Health insurance is typically the most expensive component of an employer’s benefit program, but is often considered to be the most important component, as well. Employers with 50 or more full-time or full-time equivalent (FTE) employees are required to provide health care coverage as part of the Affordable Care Act, but for employers who are not subject to health care reform, health insurance is technically a voluntary benefit, although business who choose not to offer it may see an impact on their ability to recruit and retain top talent.
Vision and dental insurance are often lumped under the umbrella of health insurance as well, even though they are a separate benefit from medical insurance, usually provided by different carriers.
There is no federal law requiring employers to offer retirement benefits to employees, but they are a popular benefit among many businesses. There are two major categories of employer-sponsored retirement benefit plans:
- Defined contribution plans: These plans allow employees to contribute a certain portion of their pre-tax earnings to an individual retirement account that the employee is responsible for managing. The value of the account is determined on how much is contributed and the performance of the employee’s chosen investments. Employers may choose to contribute to the account, but are not required to do so. The most popular type of defined contribution plan is the 401(k) plan.
- Defined benefit plans: These plans promise an employee a specific monthly benefit amount paid upon retirement. Pensions are an example of this type of plan.
Disability coverage provides workers with financial benefits in the event of a sudden injury or accident. These benefits programs are not the same as workers’ compensation programs. Instead, short and long-term disability (STD and LTD) insurance plans cover injuries or illnesses that occur both at and away from the workplace.
Life insurance is another popular voluntary benefit program. Many of the employer-sponsored life insurance plans offer term life coverage, with the option for employees to purchase additional coverage.
Employers who are subject to the Family Medical Leave Act (FMLA) are required to provide unpaid leave for employees to deal with a serious health condition or provide care for a close family member who is dealing with a serious health condition. Typically, FMLA leave is limited to 12 weeks, but can be extended under certain conditions.
Employers may also choose to provide paid leave as an added benefit to their employees. This leave typically either takes the form of sick leave, vacation or paid time off (PTO), although employers can also provide additional paid leave options, like holiday pay, days off for birthdays or even paid volunteer time. Although there is currently no federal legal mandate for private employers to provide paid leave, many states and other organizations are pushing for paid leave requirements.
Additional optional benefit programs:
There is no limit to the number of additional benefits programs an employer may choose to provide, and they can include anything. Below are just a few of the additional benefits employers might choose to offer:
- Accident insurance
- Legal assistance
- Identity theft protection
- Employee Assistance Programs (EAP)
- Employee wellness programs
- Tuition reimbursement
- Pet insurance
- Travel insurance
- Cancer insurance
Building a benefits program can be an intimidating task for employers: The sheer amount of options combined with the potential for legal penalties if you get it wrong make the prospect overwhelming. That’s why many businesses choose to partner with a professional employer organization (PEO) who can not only go about building the perfect benefit program, but also handle all the tasks associated with administering each of the employer’s chosen benefit plans.
G&A makes building a high-quality, affordable benefit program a snap.
As one of the nation’s leading PEOs, G&A Partners takes the guesswork out of employee benefits. With a wide range of benefits options to choose from top-tier carriers and a team of benefits experts ready to handle all the paperwork, we make it easy to create a benefits package that meets both your employees’ needs and wants, as well as your company’s budget. So, from enrollment to administration and everything in between, G&A Partners has you (and your employees) covered.
Learn more about G&A Partners’ expert employee benefits solutions >>