What Is In An Employee Benefits Plan?

Monday, May 9, 2022 17:52 Posted by Admin

When prospective employees consider new positions, they typically evaluate the company, the job itself, the compensation, and the benefits. There may be other, less tangible factors like the environment and culture to include in the calculation as well. While benefits can vary widely depending on the size and stage of the company, some are considered standard.

Health insurance is essential but not universal.

Every year, the Kaiser Family Foundation compiles a report about health insurance based on a survey of private and public (non-federal) employers. As usual, the study for 2021 indicates that the percentage of companies providing coverage to their workforce increases with the organization’s size. While almost every firm with more than 1000 employees offers health insurance, only 49% of those with fewer than ten workers do. Overall, health insurance and group employee benefits are provided by 59% of employers, but that doesn’t mean that every worker in each company has access or takes advantage of the opportunity. Overall, approximately 56% of workers enrolled in coverage offered by their own employer.

Employees who have access to health insurance through their employer but choose not to use it may decline for one of several reasons:

  1. They may have access through another source. For example, since the passage of the Affordable Care Act, young adults retain eligibility for inclusion on their parents’ plans (if applicable) until they reach 26 years old. That coverage might be not only a better financial bargain but also more familiar than an offering from a new employer.
  2. Employees may have a spouse or domestic partner with more comprehensive or affordable coverage through their own employer and choose to use that rather than sign up with their workplace.
  3. The cost may be prohibitive. While the Affordable Care Act included a requirement for everyone to obtain insurance, it also increased options for access. In some cases, it is more economical for individuals to purchase coverage through their state-sponsored exchange than to buy it from their employer.
  4. The person may have Medicare or other coverage for other reasons.

Health care insurance can be comprehensive or limited, expensive, or free and may offer varying levels of security to different employees. As a result, employers continually search for the right balance between providing ample coverage at a price they can afford while incentivizing employees to safeguard their health without penalizing those who don’t, won’t, or can’t participate in wellness programs.

When health insurance is the foundation, employers may add related offerings like dental, vision, and disability protection for their employees’ well-being. Overall, employee well-being as a concept is experiencing a surge in support among corporate human resources executives, according to a recent report in the Harvard Business Review. The Gartner survey from 2020 identified significant enhancements to well-being programs in 94% of responding companies, including mental health, physical well-being, and financial wellness.

Paid time off is even more common and more varied in implementation than health insurance. According to recent reports from the U.S. Bureau of Labor Statistics, 79 percent of U.S. workers in private industry have access to paid vacation time. Almost the same number have paid time for illness. Moreover, for each type of paid leave, workers in the higher pay ranges are more likely to enjoy the benefit than those with lower pay. That holds for paid holidays, with 91 percent of workers in the top quarter of income receiving some number of paid holidays, while less than half of employees at the bottom ten percent of pay levels received paid holidays.

Two PTO (paid time off) trends gaining traction are:

  1. allowing employees to use PTO for whatever purpose they prefer or need (granting a specific total amount of time instead of separate allowances for vacation and sick time).
  2. unlimited PTO.

PTO Bank

With a PTO policy that provides a set number of days or hours without regard to the purpose, employees receive their allotment or accrue it and track it as they would normally. The primary difference from the employee perspective is that the policy offers them the freedom to use their time off for the most relevant purpose. For example, suppose one employee is rarely sick and doesn’t need to use time designated for illness. That employee would usually have to forgo using earned time or fib about a “mental health day.” On the other hand, another employee might need to save vacation time to recover from a planned medical procedure. Both would benefit from the flexibility and transparency of the PTO bank option.

Unlimited time off is an unusual benefit but a tremendous recruiting tool.

With an unlimited time-off policy, the worker can use as many days as they want to for either leisure or illness or other priorities (such as personal leave and maternity or paternity leave.) Typically, the policy includes a requirement for approval and an admonition that the employee must adequately perform their job and that their absence is not disrupting the company’s operations. This kind of policy is not a fit for most companies, but it can be a key recruiting tool in some cultures.

Other benefits

Depending on the company, the industry, and the location, additional benefit options can vary from the increasingly popular remote or hybrid work option to transit subsidies, childcare assistance (primary or back-up), retirement and other financial planning advice, pet insurance, legal insurance, student loan repayments, tuition repayment, fitness memberships, even concierge service. Taylor Benefits Insurance can help you identify and structure the offerings that make sense for your workforce.

Written by Todd Taylor

Todd Taylor

Todd Taylor oversees most of the marketing and client administration for the agency with help of an incredible team. Todd is a seasoned benefits insurance broker with over 35 years of industry experience. As the Founder and CEO of Taylor Benefits Insurance Agency, Inc., he provides strategic consultations and high-quality support to ensure his clients’ competitive position in the market.

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