Benefits Costs on the Rise

With workers increasingly gravitating to jobs that offer a full range of benefits, it’s no surprise that health insurance, 401(k)s, HSAs, and other program options are becoming standard offerings, even for small and medium-sized businesses (SMBs). However, with health insurance costing an average of 8% of an employee’s annual salary and total benefits packages topping 30%, many SMBs are finding the cost of these benefits overwhelming. With benefits costs projected to increase another 5.3% in 2021, many SMBs may struggle to continue offering the same level of benefits to their employees; but there is hope. When SMBs choose an HR partner like Sheakley, they can harness the collective bargaining power of every client company to achieve lower costs, while still offering the highest-quality benefits for their employees.

Join the collective

The costs associated with offering health insurance, dental and vision benefits, life insurance, and retirement plans are prohibitive for many small and medium-size business owners. PEOs utilize the collective bargaining power of all of the employees they represent to negotiate Fortune 500-level benefits for their client companies. By entering into a shared employment arrangement with Sheakley, you can provide your employees with affordable, high-quality benefits.

Health insurance

Offering a health care plan is one of the best ways to demonstrate that you are committed to the well-being of your employees and their families. By reducing their stress and concern about how to afford necessary medical care, your employees may become more loyal and productive. Often available from your health insurance carrier, dental insurance plans are designed to cover the costs of preventative and emergency procedures for your employees. Vision insurance is often an optional addition to your health policy and helps cover the costs of regular vision exams and a percentage of the cost of corrective lenses.

Health reimbursement accounts, sometimes called health reimbursement arrangements or HRAs, are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. The employer funds and owns the account and may elect to rollover any unused amounts to be used in subsequent years. While Flexible Spending Accounts (FSAs) and Heatlh Savings Accounts (HSAs) allow employees and employers to contribute pre-tax dollars through payroll, the fundamental difference with HRAs is that they are solely-funded by the employer or plan sponsor. Check out Health Reimbursement Accounts to learn more.

Retirement and fringe benefits

Extending the benefits package of an SMB beyond health insurance is critical for smaller companies to compete against their larger counterparts. Retirement plans, FSAs, HSAs, and other options can help make an SMB more attractive to employees and help improve employee retention. However, being able to afford these types of benefits can prove difficult for many SMBs. That’s why working with a PEO to help lower the costs of retirement and fringe benefits is critical.

One of the most sought-after retirement plan offerings is the traditional 401(k). With retirees living longer than ever before, saving for retirement has become a more serious concern for workers young and old. Offering a 401(k) plan as part of your benefits package can help you stand out among other SMBs, and may even make you competitive with larger companies. Not only will you be helping your employees prepare for life during retirement, but you’ll also be able to improve your retention efforts and have a more loyal workforce. Read 401(k) Retirement Accounts to learn more about this valuable retirement benefit.

Employee education

Don’t leave employees out in the dark when it comes to their benefits packages. Health care plans, retirement packages, and other benefit offerings can often be confusing. Employees consistently underestimate the value of their benefits package and fail to understand how to take full advantage of these valuable resources. Communication, education, and ease of access are key to ensuring that your employees get the best bang for their buck from your employee perks. To learn more about how working with a PEO can help your employees better understand their benefits, check out Help Your Employees Get the Most Out of Company Benefits.

Banish benefit administration woes

After benefits costs, plan administration can be the biggest headache for SMB owners and managers. Understanding deadlines, compliance requirements, and regulatory issues can be a full-time job in and of itself. When you partner with Sheakley’s PEO, you don’t have to worry about benefit administration woes. Sheakley’s benefits experts manage the entire carrier relationship – handling renewals, open enrollment, employee education, and even planning for annual changes to your benefits plan.

Making benefits more affordable

Offering the right benefits packages for your employees helps them stay healthier and plan long-term for retirement, while helping you build a more committed and productive workforce. Developing the right mix of benefits for your employees is easier than you think. Not sure which benefits you should offer? Selecting the Best Benefits for Your Organization can help steer you in the right direction. Sheakley’s HR Outsourcing and PEO experts can help you identify the ideal combination of benefits for your company and employees and manage the enrollment process for you as your business grows.

Learn more about Sheakley’s PEO and contact us for your free consultation today. Stay up-to-date on all things Sheakley by subscribing to our blog and following us on social media.