Offering a 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 tailored employee benefits packages can help them attract and retain top talent while promoting productivity. By understanding the available options and implementing cost controls, small companies can build a benefits plan that meets their needs.
Why Small Businesses Should Offer an Employee Benefits Plan
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.
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.
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.
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: 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.
Key Benefits for Small Business Employee Packages
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. Without coverage, employees can face high out-of-pocket costs for necessary medications.
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
Paramedical Coverage
Paramedical services provide preventative care and treatment for health conditions. They are the second most used benefit after prescription drugs.
8 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.
Similar, 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.
Additional Specialty Benefits to Strengthen Coverage
In addition to core health benefits, a variety of supplemental “specialty” benefits can enhance wellness coverage.
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.
How to Customize Employee Benefits for Your Small Business
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.
How to Choose the Best Benefits Provider for Your Small Business
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.
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 – What to consider?
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
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.
Article Sources
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