Managing a practice is hard work. Between the patients, records, billing, payroll, appointments and communication, employees still need to be managed. Benefits are often pushed to the backburner because they are assumed to be so expensive. It is true major health insurance is extremely expensive, but there are a few options you can implement to show your employees you care.
During a period of time like our current economic environment, you may want to keep in mind your current benefit structure for your employees.
Why offer benefits?
Benefits have long history of being offered by employers and include everything from country club memberships to box seats at the professional sports stadium. While these are more unusual benefits, the most common benefits are retirement and insurance.
Benefits are offered to employees as an incentive because we live in a market economy and other companies are offering them. While it would be easier to offer an employee cash in lieu of student loan repayments, retirement matches and insurance premiums, the significance of an employer providing non-cash benefits makes a statement to the employee about the culture of the workplace and environment.
Start with what kind of culture you want to create.
An all cash workforce can feel like it is “every man for himself” and promote an “eat what you kill” culture. This most likely would undermine your care and concern for your employees. Since you are working to create a team environment, cash may not communicate the team commitment you want.
In contrast, benefits communicate a commitment to the employee as they are inherently more difficult to administer, therefore “stickier” to get out of. Also, there are sometimes better rates pooling employees with each other allowing for discounts.
However practical the benefits are, we have all seen and heard stories of co-workers and loved ones sustaining accidents and battling diseases. Many of us are painfully aware of the devastating financial impact that friends and family members experience as they deal with prolonged medical treatment.
The daily grind for a friend or co-worker with stage four cancer is so incredibly awful we would do anything to alleviate their suffering. Benefits offer an “ounce of prevention” that may alleviate the “pound of cure” a GoFundMe account may seek to offer.
The first benefit people consider is usually health insurance.
When it comes to health insurance, expensive is an understatement! According to the National Business Group on Health (NBGH), the 2019 cost of healthcare for a single employee can cost close to $15,000!
This is simply unaffordable for most practices.
So if not major medical, what options are available?
There are alternatives to show your employees and prospective employees that you care for your team without breaking the bank. Here are three.
1. Group Term Life Insurance
Term life insurance, a flat fee for a fixed amount of life insurance coverage, is a simple way to provide for unexpected events in the life of your staff. A term policy covers the life of your staff member should the unthinkable happen. This can be given to your employees without it being taxable to them. The IRS does not require this benefit to be added to their taxable income if the insurance benefits are $50,000 or less. In the worst case scenario, you could provide critical money to your employee’s family when they need it most.
Also, while it could potentially benefit your employee, this coverage can be purchased for $10 per month per employee or less making this an attractive option.
2. Flexible Spending Account (FSA)
The popular health savings account (HSA) may have overshadowed its smaller cousin the FSA. While the two sound similar and act similarly, the FSA does not require the employee to maintain a qualifying high deductible health insurance policy.
They both function similarly. Funds are deducted before taxes (even before payroll taxes) to be used for qualified medical expenses. The money can then be used for prescriptions, co-pays, vision, dental and elective surgeries. The 2019 maximum amount to contribute is $2,700.
While there is a cost to have an administrator manage the FSA, it can potentially be entirely offset by the savings from payroll taxes of the business. This benefit could help your employees reduce their taxes, pay for healthcare and potentially save you money! That’s a pretty rare option.
3. Disability Insurance
Earning potential is one of the most important assets we all have. While most people don’t consider the catastrophic impact of disability on their family’s standard of living, the risk is very real. Fortunately, this risk is easily remedied with affordable disability insurance coverage.
Disability insurance covers your employees in the event they are incapacitated from performing their job. While most may think of accidents, it will also cover chronic sickness and the disability emanating from a disease. Some disability insurance providers even offer partial disability in the event a sickness limits their ability to work full time.
Disability insurance is divided into short term and long-term coverage. It commonly includes a waiting period before starting in the event of a claim. Long-term disability is commonly purchased by employers for their employees. It can be purchased for as little as $25 per month. Providing this simple and inexpensive benefit could provide a long-term income source for your employee should the employee be impacted by a disability.
The benefits maze is complex and filled with jargon best navigated by a human resource professional. Before despairing at the sticker shock of major medical insurance coverage, know there are options for providing your employees with some insurance coverage.
These three options, term life insurance, long term disability and flexible spending accounts communicate the care and concern you have for your staff while providing an affordable insurance benefit for your practice.