Employee benefits have been part of the American hiring landscape for generations. Options have improved over the years, along with the ability to create customized packages that include both standard and voluntary benefits. In order to help employers make sense of it all, we prefer to divide the entire catalog of possibilities into four different categories.
Each of the four categories is explained in detail below. As you read, ask yourself what types of benefits your company offers in each of them. Maybe all four categories are covered by your package. Then again, that might not be the case.
Category #1: Health Benefits
Health benefits are the first category because they are the most common benefit among U.S. employers. Health benefits start with some sort of health plan, be it self-funded, level-funded, or fully insured. Employers pay part of the cost while the rest is covered by employee contributions. You know the routine. It is pretty straightforward.
Our focus is the self-funded health plan as a low-cost alternative to traditional health coverage. Through self-funding, our clients are able to provide healthcare benefits offering comparable coverage but at a more affordable cost to employees. We think they are the best option in many cases.
Also in this category are alternatives like health savings accounts (HSAs), accident insurance, long-term disability, and so forth. Note that health plans are the only benefit in this category considered traditional. All the rest are voluntary benefits.
Category #2: Retirement Options
Along with health plans, retirement plans are pretty common among larger U.S. companies. Back in the days before the 401(k), retirement plan were usually pension. These days, pensions are harder to come by because they are very expensive to maintain.
The 401(k) is a more affordable option because it doesn’t guarantee retirement benefits at a set level. Benefits are determined by fund performance. The model relieves employers of burdensome long-term obligations while still giving employees access to retirement funding.
Category #3: Social Benefits
This third category is social benefits. This is where employers have the greatest opportunity for flexibility. Social benefits are voluntary benefits. That’s the big draw for employers.
Examples of social benefits include things like student loan repayment assistance, pet insurance, financial wellness training, financial planning, and even life insurance. The beauty of social benefits is that there really are no limits. Employers are free to offer whatever they can get their hands on.
Category #4: Time Off
The last benefit category is Time Off. Employers can approach this in any number of ways. An entry-level benefit would be so many paid holidays per year. The next level up would include one week of paid vacation along with a designated number of personal and sick days. Many companies tie these extra benefits to length of service.
There is a case to be made for unlimited paid time off (PTO). Among companies that offer it, perception seems generally good. The philosophy behind unlimited PTO is to allow employees to come and go as they please just so long as they get their work done and do it up to standard. Obviously, certain types of industries are too tightly scheduled to make unlimited PTO work.
An Emphasis on Health Benefits
Despite there being so many options for employee benefits, the main emphasis for most employers is the health benefits. This is not without reason. Health benefits tend to be the most expensive. For some companies, health benefits are all they can afford. StarMed offers a low-cost alternative to fully insured plans if you find that your company is in such a position.