In the past, as long as you provided health insurance and retirement benefits, your benefits were considered competitive. Now, the pressure is on employers to supply more diverse options.
Employee-friendly startups keep getting more creative with their benefits packages. Further, the federal government, states and localities are mandating more employee benefits than ever. Consequently, it's important to revisit your benefits strategy to ensure you're meeting your legal obligations and the needs of your workforce.
Employee benefits is one of the core business processes that touches payroll, so it's important to evaluate your benefits package to ensure it's not only satisfying your employees, but also maximizing your business efficiency. For an outline of best practices to follow, download our 6 Pillars of Payroll checklist below.
Once you have your checklist, ask yourself these questions as you reevaluate your company's benefits.
1. Health benefits
- Are you prepared for the projected increase (4.4%) in employer-sponsored health care costs for 2021?
- How valuable is health insurance — including for medical, dental and vision — to your employees?
- What is the participation rate — for employees and their families — in your group health plan?
- How much is the cost-sharing amount? Is it in line with industry standards?
- Have you considered all the health benefits options available to you — such as fully insured versus self-insured plans; preferred provider organization (PPO), health maintenance organization (HMO), point-of-service (POS) and high-deductible health plans (HDHP); the Small Business Health Options Program (SBHOP); a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA); and health savings accounts (HSAs) and health flexible spending accounts (FSAs)?
- If you're an applicable large employer under the Affordable Care Act, do you have an efficient system for administering the requirements of the Act?
2. State-mandated employee leave
- Are you familiar with the various types of employee leave that some states require — such as paid sick leave, family leave, jury duty leave, voting leave, bereavement leave and domestic violence leave?
- Do your employees work in a state or locality that mandates leave? If so, is the time off paid or unpaid?
3. Financial wellness
- Is buying a home, saving for retirement or sending children to college essential to your workforce?
- Are your employees concerned about student loan debt?
- Is your 401(k) match generous enough?
- Do your employees need access to educational resources that promote financial stability?
4. New laws relaxing 401(k) standards
- Do you know about the new federal laws designed to relax 401(k) standards? For example, the Setting Every Community Up for Retirement Enhancement (SECURE) Act makes it easier for small employers to sponsor retirement plans while reducing administrative costs and burdens. Further, the IRS published a final rule simplifying the hardship withdrawal standards for 401(k) participants.
5. State-sponsored retirement plans
- Did you know that a number of states — including Illinois, Oregon, California and Connecticut — now require that employers offer a qualified retirement savings plan? Employers without such plans must participate in their state's auto-enrollment, payroll-deduction Roth IRA program.
6. Benefits communication
- Do you communicate benefits in a way that employees can easily understand?
- Can employees access their benefits information online?
- How simple is it for employees to make benefits elections during onboarding and open enrollment?
These questions are just the tip of the iceberg. For a more in-depth evaluation of your benefits strategy, make sure to schedule a business review with one of our Connected Representatives!