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Employee Benefits Packages for Small Businesses – Control Costs While Boosting Employee Wellbeing in 2024

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Offering a comprehensive benefits package is no longer just for big corporations. Small businesses can also provide quality benefits plans to support their employees’ health, wellness and financial security. With thoughtful design, suitable benefits packages for small businesses can be an excellent decision for the survival of both the employees and owners.

The suitable small businesses benefits packages can help them attract and retain top talent while promoting productivity. Tax advantages provide further incentives for offering benefits. By understanding the available options and implementing cost controls, small companies can build a benefits plan that meets their needs.

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Owning a small company? Benefits Packages for Small Businesses will be your solutions!

The Benefits of Offering a Plan for Small Businesses

Implementing employee benefits packages for small businesses provides them with advantages in multiple areas.

Attract and Retain Top Talent

Talented employees have options in today’s job market. A key strategy for recruitment and retention is providing a competitive benefits package. Surveys consistently find that benefits packages are among the top considerations for employees after salary.

According to the 2022 WorkForge Blue Collar Report, benefits were the second-highest priority for blue-collar workers after pay, with 35% ranking benefits as a top-three consideration. Benefits also ranked high among office and remote employees in the report.

The 2022 Bank of America Small Business Benefits Study found that 62% of employees consider health insurance and retirement plans essential benefits. These were the benefits small business employees valued most.

With the current labour shortage and competition for skilled talent, a quality benefits plan can give small businesses an advantage in attracting top candidates. Offering benefits shows employees that the company cares about their well-being. This perception boosts retention as employees are less likely to leave for alternate opportunities.

Boost Employee Health, Morale and Productivity

Providing health insurance and other wellness benefits demonstrates an investment in employees’ physical and mental health. Access to health services enhances workforce well-being. Employees are less distracted worrying about uncovered medical costs. Therefore, health insurance options for small businesses are becoming even more necessary.

A report by Sun Life Financial found that 46% of employees feel benefits offerings positively affect their mental health. Employees with access to benefits like prescription drugs and dental and paramedical coverage can better address health issues. This improves morale and reduces time away from work for medical reasons.

Healthier employees with less stress are more engaged and productive in their roles. A study from BenefitNews quantified the impact:

  • Employees with high engagement are 21% more productive
  • Disengaged employees had 37% higher absenteeism

Offering benefits is a strategic investment in building an engaged, healthy, productive workforce.

Tax Advantages and Savings

A key incentive for benefits packages for small businesses is the tax deductibility of premiums. Benefit plans also provide cost-reduction opportunities:

  • Premium Deductibility: Premiums paid for employee health and dental benefits are considered an eligible business expense for tax purposes. This provides a tax deduction for benefit costs.
  •  Payroll Savings: According to Sun Life Financial, contributions to group retirement and savings plans can sometimes reduce Canada Pension Plan (CPP) contributions, decreasing payroll costs.
  •  Premium Cost Savings: Insurers offer lower premiums for group and individual plans. Small businesses can benefit from these group savings.
  •  Custom Cost Controls: Small businesses can implement cost controls like plan limits and employee contributions to manage benefit expenses.

Benefit plans make financial sense by providing tax and potential payroll advantages along with options to control costs.

Base Benefits to Consider

Certain core benefits are included in most standard packages. These “base” benefits packages for small businesses provide essential health and financial protection.

Health Insurance

While provincial and territorial health care plans provide essential services, gaps in coverage often leave Canadians paying significant medical expenses out of pocket.

Extended health benefits help fill in the gaps with coverage like prescription drugs, paramedical services and travel emergency medical. Employer-provided plans bridge the gap between government coverage and employee costs.

Prescription Drug Coverage

Prescription drug plans are the most used health benefit, according to the 2022 Sanofi Canada Healthcare Survey. 95% of plan members utilized prescription medications.

The survey found that employees spent an average of $800 annually on prescriptions. Having coverage for needed medications supports health outcomes and reduces financial stress.

Insurers use strategies to optimize prescription drug plans and control costs:

  • Regular reviews to add cost-effective new drugs
  •  Access to generic drug options
  •  Dispensing fee controls and negotiations
  •  Healthcare management for complex conditions

These tactics provide comprehensive, affordable prescription benefits.

Paramedical Coverage

Paramedical services provide preventative care and treatment for health conditions. The Sanofi survey determined they are the second most used benefit after prescription drugs.

These services include:

  • Physiotherapy
  •  Massage therapy
  •  Chiropractic
  •  Naturopathy
  •  Osteopathy
  •  Dietetics
  •  Podiatry
  •  Psychology services

Plans provide annual dollar limits per coverage type that members can use towards paramedical visits. Access to these services enhances overall wellness and reduces the burden on the healthcare system.

Dental Plans

Dental benefits cover preventative, routine, primary restorative and orthodontic dental treatment. Typical plan coverage includes:

Essential Services: Oral exams, cleanings, fillings, x-rays

Primary Services: Crowns, dentures, bridges

Orthodontics: Braces, retainers

Regular dental visits prevent issues and avoid costly subsequent treatment. Employers reduce absenteeism and enhance workforce health by funding primary preventative dental care.

Vision Care Benefits

Vision care coverage provides financial assistance with:

  • Routine eye exams
  •  Eyeglasses and contact lenses
  •  Laser eye surgery

Regular eye exams safeguard eye health and identify issues early. Vision benefits ensure employees can access both exams and corrective products.

Disability Insurance

Illness and injury can occasionally render employees unable to work. Disability insurance for small business employees and others helps support them and protect employers during these disruptions.

Short-Term Disability: Covers absences up to 120-180 days

Long-Term Disability: Covers more extended absences beyond short-term periods

In addition to income replacement benefits, quality disability carriers provide resources to support employee recovery and return to work. Preventing and reducing the impact of disabilities benefits both employees and small businesses.

Life & Critical Illness Insurance

Life insurance provides a lump-sum payment to beneficiaries upon policyholder death. This financial protection eases the burden during a difficult time. Then, what are the importance of life insurance plans for small businesses?

Critical illness insurance pays out a lump-sum amount after diagnosis of a covered serious illness, such as:

  • Cancer
  •  Heart attack
  •  Stroke

This funding can help pay bills and cover treatment costs. Employees have peace of mind knowing their families are protected from the financial impacts of unexpected life events.

Bundling life and critical illness provides comprehensive coverage. Some carriers offer discounted bundled rates, reducing costs for employers.

Specialty Benefits to Enhance Plans

In addition to core health benefits, a variety of supplemental “specialty” benefits can enhance wellness coverage.

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Benefits Packages for Small Business: “small” but not “small” at all!

Paramedical Coverage

Expanding paramedical coverage beyond basics like physiotherapy is an impactful benefit. Specialty services to consider covering include:

  • Massage therapy
  •  Acupuncture
  •  Naturopathy
  •  Chiropractic
  •  Osteopathy
  •  Counselling
  •  Nutritional counselling

According to recent surveys by Sun Life:

  • 93% of plan members used paramedical benefits
  • 82% agreed coverage improved their overall well-being

Employees appreciate expanded paramedical coverage and use the services extensively.

Travel Insurance

Business travel insurance safeguards employees away from home:

Emergency Medical Coverage – Up to $5 million per person for unexpected illness or injury.

Travel Assistance – Helps locate medical facilities, provides emergency transportation and more.

Especially after pandemic travel restrictions, employees value coverage that protects them during work-related trips.

Health Spending Accounts

Health spending accounts (HSA) reimburse employees for health and dental expenses not covered under other benefits. They provide tax-effective flexibility using:

  • Credits/debit cards to direct bill-eligible expenses
  •  Online portals for easy access and tracking
  •  Rollover of unused credits

HSAs allow small businesses to control costs by setting annual limits while providing customized supplemental coverage.

Customizing Your Benefits Packages for Small Businesses

Then now, the question should be asked is that, how to customize employee benefits packages?

Benefits packages are highly customizable based on company priorities and budget considerations. Ways benefits packages for small businesses can be tailored as plans include:

Setting Limits and Cost Controls

Managing benefit costs for small businesses, is it a difficult task? Well, in fact, it is not a big deal at all. Small companies can implement cost controls to create affordable benefits plans:

  • Coverage maximums on health and dental benefits
  •  Deductibles requiring employee payment before coverage
  •  Co-insurance payments to share costs
  •  Tiered health and drug formularies
  •  Health spending accounts with annual limits
  •  Employee contributions toward premiums

These measures allow benefits packages for small businesses to be planned with high quality benefits while optimizing value and controlling expenses based on their budget and risk tolerance.

Options by Employee Class

Rather than a one-size-fits-all approach, benefits packages for small businesses can be offered with customized options by employee class:

  • Executives – Enhanced coverage with low deductibles
  •  Full-time – Comprehensive core health/dental benefits
  •  Part-time – Basic plans with higher deductibles
  •  Seasonal – Optional limited benefits like telemedicine

Tiering plans help attract talent at all levels while aligning coverage and costs. HR can analyze company demographics and roles to develop tailored solutions.

Voluntary Portable Benefits

Voluntary or optional benefits packages let employees purchase supplemental coverage at their own cost. These portable plants have the advantages of:

  • Increased satisfaction – Employees can customize to their needs
  •  Broader offerings – Include supplemental life, disability and critical illness
  •  Seamless administration – Easy payroll deductions facilitate enrollment
  •  Portability – Employees can take coverage with them if they leave

Rather than subsidizing total premiums for specific offerings, voluntary options provide affordable flexibility. Employees appreciate the ability to buy customized protection.

Group Retirement and Savings Benefits Packages for Small Businesses 

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Benefits Packages for Small Businesses are more and more recognizable and received than ever

Beyond health benefits, group retirement and savings plans are a strategic offering to consider. These plans help employees save for retirement in a simplified, cost-effective way.

Advantages of benefits packages for small businesses include:

  • Tax benefits of group benefits plans – Contributions are usually tax deductible as a business expense.
  •  Payroll expense reduction – This may lower CPP contributions required in some cases.
  •  Fiduciary governance – Experienced providers manage plan governance and compliance.
  •  Employee retention – Retirement plans make compensation more competitive.

Group plans simplify the process for small companies to offer tax-advantaged retirement savings options to their workforce.

Savings plans complement medical and dental benefits as part of the comprehensive benefits packages for small businesses focused on employee well-being and financial security.

Choosing the Right Provider of Benefits Packages for Small Businesses 

Selecting the right provider is critical to successfully implementing benefits packages for small businesses. Business owners have multiple options to consider, including:

Insurance Companies – Traditional insurers like Sun Life, Manulife, and Canada Life offer fully bundled packages.

Benefits Consultants – Brokers like Hub International help compare plans from top insurers.

Benefits Associations – Organizations like Chambers Plan provide exclusive plans for members.

Online Insurance – Low-cost digital insurance companies like PolicyMe.

Choose a provider that ensures benefits packages for small businesses and gets tailored plans at optimal rates. Comparing multiple options guarantees the best fit based on coverage needs, cost factors and service expectations.

Communicating Your Benefits Packages for Small Businesses Effectively

Once a benefits package is developed, small businesses need a strategy to promote offerings and educate employees. Tactics to drive benefits engagement include:

Highlight Offerings in Recruiting

Promote benefits during hiring to attract candidates. Call out health coverage, retirement plans and other perks on job postings.

New Hire Benefits Enrollment

Collect coverage elections during onboarding. Guide to ensure employees understand all available options.

Ongoing Internal Promotions

Send regular email updates on benefits offerings. Use intranet banners to highlight open enrollments.

Accessible Resources

Supply plan details through an employee handbook. Offer contact information for follow-up questions.

Virtual Benefits Fair

Host an online “fair” with info sessions on each benefit plan. Allow employees to engage and learn about offerings.

Effective communication of benefits options helps boost engagement, satisfaction and productivity.

Benefits Packages for Small Businesses – Where to Trust?

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The case advocating benefits packages for small businesses remains compelling. Benefits enhance recruitment, retention, health, productivity and morale. Cost reduction strategies provide flexibility to customize affordable plans.

Here are the recommended next steps for benefits packages for small businesses to be considered implementing:

  • Review this guide and develop a wish list of desired offerings
  •  Catalogue current employees and their coverage priorities
  •  Set budget thresholds for plan costs
  •  Research group benefits providers that cater to small businesses

When researching group benefits providers, finding an agency specializing in small business needs is essential. One company worth considering is IDC Insurance Direct Canada, a premier insurance agency providing customized employee benefits plans as well as benefits packages for small businesses to mid-sized Canadian companies.

IDC Insurance Direct Canada offers an extensive range of benefit plans, including dental, health, disability, life, critical illness and more. Their expert team advises on benefits packages for small businesses which are specifically tailored to clients’ favour.

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Unsure about benefits packages for small businesses? Contact IDC now!

Key advantages IDC Insurance Direct Canada provides include:

  • Access to top Canadian group health benefit carriers
  • Free customized quotes comparing multiple carriers
  • Guidance on voluntary benefits to enhance packages
  • Administration support handling enrollments and changes
  • Ongoing account management and renewal support
  • Employee communication materials explaining benefits

With group benefit partners like IDC Insurance Direct Canada, small businesses can access high-quality plans suited to their workforce and budget needs. The agency simplifies researching plan options and finding the right fit.

Once a preferred group benefits partner is selected, the following steps include the following:

  • Compare multiple quotes for optimal rates
  • Select provider partner(s) and finalize benefit offerings
  • Develop a communication and promotion strategy
  • Enroll employees during onboarding and open enrollment periods

Business owners can construct competitive benefits packages for small businesses at reasonable expenses by employing a thoughtful strategy aligned with workforce requirements. The investment pays dividends through total rewards that attract talent, improve well-being and drive performance.

When leveraged strategically, benefits packages for small businesses can provide them with an advantage in productivity, recruitment, retention and ultimately driving the business forward. Investing in employees through benefits demonstrates that their well-being and financial security are a priority.


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