After compensation, nothing generates more emotion for employees and leadership alike than benefits. As we start thinking about fall (I know, I want to continue savoring summer too, but the call of cooler temperatures and tailgates is strong), thoughts turn to open enrollment, dreading the inevitable health insurance increase notices, and thinking about how to maximize the return on benefit dollars spent.
What I have seen (and that may seem cliche) is that employees will join a company for the salary, and stay for the benefits. Benefits aren’t free, and making sure that your employees truly want and value them is important.
Thus, the purpose of this blog is to chat about trends, as well as to put in a request for you to complete our annual benefit survey. Those who participate will receive a free copy of the survey data.
Here are some of the themes that we are seeing with our small to medium sized organization clients:
Employers are getting creative when looking at health insurance.
Many of our small business and nonprofit organization clients are really struggling with the ever increasing costs of health insurance. Our startup clients are trying to figure out how to offer benefits for the first time, too.
In a timely article from HR Dive: “According to a Gallagher report on well-being in the U.S., 9 in 10 employers who responded to a survey said they’d seen increases in their health plan premiums, and one-quarter of those said they’d had double-digit increases. Many are struggling to budget for the rising costs, with around half of employers in the same survey saying they have effectively managed healthcare costs.”
It is hard to compete for talent when you don’t have the employment numbers to get better insurance rates.
When this occurs, options are not unlike what’s available on the marketplace put in place by the Affordable Care Act. This may leave you asking:
What tools are available to small organizations when it comes to health insurance?
- Consider a PEO - A Professional Employer Organization (PEO) takes on the official employment of your team, and leases them back to you. This provides an organization many benefits, such as reduction in risk/liability for compliance issues and pools the employees with thousands of others. This results in being able to offer better benefits and a lower cost.
- Find a Pool - Sometimes an organization may qualify to be in a pool. Being part of a larger group, as mentioned above, can help to lower costs.
- Explore a QSEHRA - (Okay, spoiler alert. There are a few more acronyms coming your way - buckle up!) A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is a health plan that helps small businesses with fewer than 50 full-time employees pay for their employees' health care costs. QSEHRAs can be used to pay for qualified medical expenses, such as monthly premiums and other medical care expenses, up to a fixed dollar amount per year. This is a better option than giving employees a stipend, which is taxable to the employee as income. This plan also allows employers to set a budget. For example, you can allocate $500 per employee, and if the employee selects a more expensive plan, you do not have to pay more than what you have budgeted for.
- Investigate Savings Accounts - Flexible Spending Accounts, including Health and Dependent Care, help your employees shoulder out of pocket medical expenses and manage childcare costs. A Health Savings Account (HSA) is a good option to pair with a high deductible plan. Employers will often gravitate toward a plan with lots of potential out of pocket costs as they have cheaper premiums. However, employees don’t like them because of the potential high costs, especially if the employee is managing a chronic condition. The Health Savings Account provides a bit of a cushion under these circumstances.
More to consider.
Bracing for ESTA
Michigan employers are currently on edge due to the ruling of the Michigan Supreme Court on the Earned Sick Time Act. While ESTA doesn’t come into effect until February 2025, this law will have significant implications on smaller employers and how they approach sick leave. Employers could change other paid time off policies to manage the cost. Most of our clients are waiting to see what the final language will be before making any changes to their current paid time off strategy.
Parental Leave
Many employers are being more sensitive to the variety of family configurations, and tweaking their parental leave plans to allow for adoptions, surrogacy, etc. A typical plan might offer 4 weeks of leave for a non-birthing parent, and the time off for a birthing parent could be covered under sick leave/short term disability and a parental leave in addition to this. There is a wide range of possible combinations.
Wellness
Employers are keen to understand wellness programs, especially during these stressful times. Some employers use physical wellness programs as a way to reduce health insurance programs. Some employers are subscribing to mindfulness apps to help provide mental health wellness attention. Some start meetings with a ritual related to gratitude. The opportunities to support your employee’s physical, mental, spiritual, intellectual and other wellness dimensions are nearly endless.
Flexibility
Many employees became accustomed to some level of flexibility during COVID work at home, and really value flexibility, even if it is a hybrid schedule. We are generally seeing organizations that have set in office and work from home days to get the best of both worlds - flexibility for employees, yet some in person interaction to support better team building.
Interested in details around benefits?
Complete our annual survey and we will provide you with a summary of the results.
