Health Benefits can be expensive and drastically impact your P&L. Depending on what stage your business is in (start-up, survival, take-off, success) there are other options that can be more economical.
- Health Savings Accounts, FSA's
- 401K, Simple IRA with matching
If you're interested, I have a partner who works with small businesses that utilities a co-employment model to help make health benefits more affordable for small businesses.
Hi Kyle. I just found your question and you may have already found a solution to your question. Depending on your business needs (ie. legal counsel), age of your employees and their usage of benefits, and long-term goals, the benefits will vary. I would say that Health, Dental, Vision, and Life as the basics for the employee, but for the business you would need Worker's Comp or Liability, Legal, Compliance, Training, and Recruitment which can be found in a co-employment package.
For employee benefits I highly recommend a talk with Bruce Silver an expert in the field we use him and are very happy
Today, nearly 60% of small businesses do not offer health insurance. That's more than 3,000,000 U.S. small businesses that do not offer health benefits today.
Even so, a health benefits package can be the deciding factor for a potential new hire. So, you're faced with a tough decision: To offer health benefits or not to offer health benefits? To answer this question, you have to understand why most employees value health benefits over salary.
Employees value health benefits over pay because health benefits are tax deductible The history of employers providing workers with health insurance goes back for decades. In the early 1940s, the federal government changed the tax laws to allow businesses to provide health insurance coverage as part of an employee's compensation package 100% tax-free.
The primary reason companies offer health insurance today is because:
It is tax deductible to the business
Employees get the benefit 100% tax-free
As a result of this enormous tax advantage, $1 in health benefits may be worth $1.50 - $2.00 in pay to an employee depending on his or her family's tax bracket.
Additionally, the $1 in health benefits costs the company less than $1 in pay. (Remember, it's tax deductible to the business so the company does not have to pay payroll taxes!)
The first mistake many small businesses make is assuming that they can not afford to offer health benefits due to costs. If you can afford to hire an employee, you can afford to offer health benefits.
The real question is how do I structure the compensation and health benefits package for maximum value to the employee and minimal cost to the company?
It's not a question of whether to offer health benefits - It's a question of how to offer them
Thanks to health care reform, startups and small businesses now have a new option: Defined Contribution Health Benefits.
With a defined contribution health plan, the company gives each employee a fixed dollar amount (a "defined contribution") the employees choose how to spend. Employees then use their defined contribution to reimburse themselves for out-of-pocket health insurance costs or other medical expenses 100% tax-free.
The reimbursements are 1) Tax deductible to the business and 2) 100% tax-free to employees.
As a result, $1 in defined contribution health benefits may be worth $1.50 - $2.00 in pay depending on the employee's tax bracket.
Additionally, the $1 in defined contribution health benefits costs the company less than $1 in pay. (Remember, it's tax deductible to the business so the company does not have to pay payroll taxes!)
Certainly Health insurance. You could consider Dental, Life, Disability, short and long-term. If you want to be different there is prepaid legal coverages. Depending on the age of the group there could be other coverages like long-term care also.
The Health and Dental are the most common.