What Is a Small Business Benefits Package and Does Your Business Need One?
When it comes to attracting high-performance employees and creating a healthy, balanced work environment, it’s important to ensure your staff members feel appreciated and supported. Many small business owners find that a great benefits package is the key to building a team that doesn’t just get the job done. It thrives.
What is a small business benefits package?
A small business benefits package describes the various perks and protections offered to employees by employers. Core packages typically include health insurance and retirement plans, but these arrangements can cover a wide range of benefits.
How much does it cost small businesses to offer benefits?
The cost of your benefits package will vary based on the size of your small business and the services included. For instance, a package including comprehensive health insurance, life insurance, retirement options, short-term disability, and a range of various wellness programs will cost more per employee than a basic healthcare plan.
What is a package policy for small businesses?
A package policy is a document outlining the benefits offered to employees, eligibility requirements, cost-sharing or reimbursement arrangements, existing grace periods, and clear guidelines for managing benefits.
Are small businesses required to offer a benefits package?
Under the Affordable Care Act, businesses with 50 or more employees are required to offer health insurance. All companies, big and small, must adhere to mandatory federal and state laws regarding workers’ compensation, unemployment insurance, and Social Security and Medicare contributions. However, other benefits are completely voluntary.
Related: Workers' Comp Insurance in Florida: What You Need to Know
Importance of offering a benefits package
A great benefits package isn’t just good for your employees. It can also give your small business an edge!
Attracts talent
For many employees, a decent salary offer is no longer enough to apply for open positions. Instead, they’re searching for true financial security, paid time off (PTO), professional development opportunities, and health insurance. If you want your small business to stand out in a competitive job market, the right benefits package is essential.
Improves employee retention
Interviewing, vetting, and training new employees is expensive, which is why reducing turnover is so important. An alluring benefits package shows your staff that you’re invested in their future, which may help more employees stick around long-term.
Boosts productivity and morale
Offering practical support in the form of high-value benefits allows employees to reduce stress and improve their physical and mental health. After all, it’s hard to treat an illness without health insurance. These perks inevitably transfer into the workplace, boosting morale and creating an environment where employees want to work.
Promotes positive work-life balance
When your team members have the flexibility to take an occasional family vacation, work remotely, or tweak their in-office hours to better suit their lives, they’re less likely to experience burnout or search for a new job with a different company, improving loyalty and productivity.
Related: Should Your Business Be Using a Biometric Time Clock?
What’s included in a small business benefits package?
Now, let’s explore the key components of a small business benefits package.
Healthcare coverage
Healthcare coverage is at the heart of most benefits packages. Options may include:
Group health insurance plans: Employer-sponsored health coverage ensures that every full-time employee has access to medical care.
Dental and vision insurance: Optional add-ons that employees can add to their package. These plans are inexpensive but highly valued.
HSAs and FSAs: Health savings accounts and flexible spending accounts help employees set aside pre-tax dollars for medical expenses.
Life and disability insurance
Life insurance policies pay a tax-free lump sum to an employee's beneficiaries in the event of their death. Short-term and long-term disability coverage replaces part of an employee’s income if they are placed on medical leave due to an illness or injury. Since Florida doesn’t mandate disability coverage, this is a strong retention perk for many employees.
Retirement planning
Retirement benefits are another high-value perk with a significant payout for employees. Clearpalm is fully integrated with Human Interest, a rapidly growing, tech-first 401k company:
SIMPLE IRA or SEP IRA: If your small business has fewer than 100 employees, a SIMPLE or SEP IRA can be affordable and easy to manage.
401(k) plans: A 401(k) plan is more complex than an IRA, but it offers higher contribution limits and greater flexibility. Federal tax credits can help offset costs.
Employer contributions: Some employers match contributions made by employees for an even more attractive offer.
Vacation and sick leave
Offering PTO is a great way to give employees flexibility. Consider including a certain number of vacation days and sick leave, as well as holiday pay for major federal holidays.
Additional benefits
To maximize your benefits package and support your employees, consider additional perks like remote work, professional development programs, and partnerships with other local businesses to offer deals and discounts for your employees.
Related: Comprehensive Guide to Workers’ Comp Dividends
At Clearpalm, we clarify benefits requirements and deliver solutions for businesses just like yours
Clearpalm is here to help you understand your legal obligations for employee benefits and curate the perfect package for your needs. Contact us today to learn more!
