We’re going to preface this blog post with an acknowledgment of a small bias: as a Third Party Administrator (TPA) of employee benefits (including health insurance) we, of course, think you should offer group benefits! But that doesn’t mean it’s the right decision for everyone – there are lots of factors to consider: cost, employee demographics, timing, benefits priority, and more. So we’re going to go back to our title question and ask:
Should your small business offer health insurance to their employees?
Let’s find out!
The “Benefit” of Benefits to A Small Business
Pardon the pun, but when it comes to owning and managing a small business, a benefits plan isn’t top of mind and the advantages aren’t always clear. Let’s break them down:
- Employee retention – Happy, healthy employees who enjoy their jobs and have the coverage they need aren’t as likely to shop around for new jobs. You’ll be able to keep the talent you have and attract new talent (see #2).
- Talent acquisition – Prospective employees are looking at an employer’s benefits plan more and more. You’ll be better equipped to remain competitive and attract top talent with a benefits plan in place.
- Employee engagement – As a key performance indicator, the more engaged employees are, the better for everyone. The right coverage can energize and encourage employees.
- Productivity – This one is a simple fact: happier, healthier employees work better and faster. Who wouldn’t want that?
- Cost savings (yes, you read that right) – Stick with us on this one! With a $1.00 pay increase, employees will take home far less after federal and provincial taxes (only $0.60 in some tax brackets). On the flip side, $1.00 paid in benefits premium = $1.00 of coverage. See? Cost savings!
If you want to accomplish any of the above, a benefits plan is a step in the right direction.
Consider Your Own Small Business and Find Your “Why”
Before you decide if a benefits plan is for you, you’ll want to examine your own small business and your employee needs to discover your benefits philosophy, or your “why.”
Not only will this help you determine whether you should offer a benefits plan, but it’s the first step in determining what your employees want, and therefore what you should and shouldn’t cover.
Benefits Solutions for the Small Business Owner
We’ve been in business for over twenty years and now have almost 100 employees working across the country – but we didn’t start out that way. Benefits by Design began as a small business ourselves, so we’re intimately familiar with the struggles a small business faces, like hiring new employees, taxes, growing the business and managing cost (that’s a big one).
For small business owners, we’ve heard time and time again that cost predictability and cost containment are paramount. Most small businesses don’t have the cash flow for the ups and downs of claims or the premiums of traditional plans, so they think benefits plans are off the table.
Standalone® is a pay-as-you-claim solution that offers a measure of cost predictability to employers. It allows employers to set their budget per employee while giving employees the flexibility and choice to use their dollars how and when they want. The bonus to small businesses is that there are no requirements on the number of employees or the amount of premium, only that you are an incorporated company.