An attractive employee benefits package can be helpful to recruit new employees, and also retain those that are crucial to your company’s success:

• Group benefits are generally less expensive than alternatives available on a personal basis;
• Group benefits help employees defray out-of-pocket costs, especially in the event of serious health problems and large provider bills;
• An employer contribution towards the group benefits is always greatly appreciated!

A recent government study reinforces the value of group health insurance as a critical employee benefit, and important to employee financial well-being.

Employee benefits can be structured to take advantage of preferential tax treatment:

• The costs of providing employee benefits are generally tax deductible as a business expense;
• The costs of employee benefits are usually excludable from your employees’ gross income, which has the added benefit of reducing your business’ taxable payroll;
• A reduction in your taxable payroll decreases your matching payments of Social Security and Medicare taxes, as well as unemployment taxes;
• For most benefits, you can setup your payroll so that the amount your employees contribute towards their benefits can also be excludable from their gross income.

Major Reasons Employers Offer Benefits:

1. Retain employees and increase employee job satisfaction

Employers want to retain employees, and they know that the health benefit is often a key. Employees who prefer a cash payment rather than group insurance are more likely to move from job to job, whereas those who participate in group insurance are more likely to stay with an employer.

Employers see employee retention as a vital element of a profitable business. Group health insurance is one way to build and maintain a quality workforce, and it is a key tool to reduce turnover.

Employers understand how the health benefit affects employees and their dependents. They know that if they employ the spouse who feels responsible to provide health insurance for the family, that employee will remain over the long term. The spouse who is not responsible for health insurance has a different motivation. These are the employees who will change jobs for a small pay increase.

Successful employers know that high employee turnover is like a cancer that will eventually eat away at and destroy their business.

2. Increase employee productivity

Employers want their employees to have health insurance. Employers need healthy employees. Health insurance protects the employer’s interest in getting employees back on the job as quickly as possible.

Employers know that when they give employees cash – as higher wages or a defined contribution – they may spend it on something else. As a result, fewer employees will be insured.

3. Attract new employees

Employers want to recruit the best possible employees. As enticements, they use employee benefits that include time off, retirement plans and a variety of insurance benefits. Of all these benefits, employees value health insurance the most. Employees see the health insurance benefit as something meaningful and important.

The health plan design chosen by an employer reflects its character. A paternal employer often chooses an expensive, traditional HMO plan. The employer that trusts its employees to do what is best for themselves offers a high-deductible health plan, often with a Health Savings Account (HSA). The vast majority of employers (even with as few as five employees), however, will offer both plans to provide employees with choices. Reduced premiums are moving ever-greater numbers of employers towards consumer-driven group insurance products, especially as well-informed agents make it their goal to so counsel them.

4. Address employees’ diverse needs, help balance work/life and help employees with financial decisions

Many employers feel a moral obligation to provide health benefits to employees. Benefits help create a sense of family or community between employer and employees. This directly affects employee morale, and is critical to a business’s success.

5. A properly designed benefits plan saves money

Beyond retaining/rewarding employees, a properly designed benefits plan promotes wellness, thereby saving personal health and business productivity costs. Only ~1/3 of the costs of employee health issues are Personal Health Costs (e.g. medical care, pharmaceutical costs, workers compensation for medical claims, etc.) – the remainder of the costs are Productivity Costs borne by the employer, through Absenteeism (sick days, paid leave, short/long-term disability) and Presenteeism (overtime, temporary help, replacement training, turnover, administrative costs, variable product/service quality, customer dissatisfaction).

There are various ways to set-up group medical, dental, vision, Section 105 Health Reimbursement Arrangement (HRA) and/or HSA plans to get the best value. Many of the plans also have wellness and advocacy features that can help use the plan most effectively. A NJ small business benefits specialist can help evaluate costs vs. benefits and maximize plan effectiveness. One of the most common times to work with a NJ benefits broker is immediately after you receive the Rate Increase notification from your existing insurer. Since increases are typically higher than the rate of inflation, it’s always a good idea to shop around, even if you end up staying with your current insurer. Shopping around gives you additional education about new health plan features, and helps you insure you get the best value from your plan.

For benefits proposal, contact 
ultimatebenefitsllc@att.net

1. Why Should NJ Employers Offer Employee Benefits?
2. When Should A NJ Startup Business Offer Benefits?
3. What Are The Basics Of NJ Employee Benefits?
4. How Should Employees Be Involved In Benefits Plan Selections?
5. How Are Employee Benefits Paid For?
6. How Can Employee Benefit Plans Be Used Most Effectively?
7. What Types Of Rules Must Be Followed?
8. What Is The Process At Policy Renewal/Plan Anniversary?
9. How Can A NJ Benefits Specialist Help?

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