Employee benefits are one of the top factors when it comes to attracting and retaining high quality employees. Retaining employees saves businesses thousands on recruiting and training, and benefits are a simple way to ensure your staff are happy. Two of the most common types of employee benefits are health insurance and group life insurance.
60% of job seekers reported that employee benefits are a major factor in their decision to accept or reject a job offer. Employee benefits not only provide your employees with financial assistance, but they also contribute to a positive work culture. With this in mind, this guide aims to explain some of the most frequent questions about employee benefits.
What are employee benefits?
Employee benefits are non-wage compensations provided on top of employees’ salaries or wages. It is a form of financial assistance from a workplace with benefits that can include health insurance, life insurance, retirement plans, paid time off and more.
How do employees enroll in health insurance?
During the open enrollment period or (in the case of new employees) during the onboarding process, employees can choose to enroll in health insurance. Employees are provided with information about their options, and will be asked to provide information about their health, habits, and potentially also their dependents.
What is a deductible?
A deductible is the money that employees pay for medical expenses before their insurance coverage begins. For example, if you have a $1,000 deductible and you incur $5,000 in medical expenses, you will need to pay $1,000 before your insurance begins covering the remaining $4,000.
What is a copayment?
A copayment, or copay, is a fixed amount you pay for medical expenses covered by your insurance, and will vary between each insurance plan. For example, if you have a $50 copay for dental checkups, you will need to pay $50 at the time of your appointment.
What is a premium?
A premium is the price of your health insurance coverage. Premiums can be paid by employees, employers, or both. If health insurance is offered as an employee benefit, the company will pay all or part of the premiums.
Can employees keep their health insurance if they quit?
In some cases, yes. COBRA (Consolidated Omnibus Budget Reconciliation Act) allows employees to continue their health insurance coverage for a limited period of time after leaving a job. However, in these cases employees will be responsible for paying the full premium, including the portion that was previously paid by the employer.
What is group life insurance?
Group life insurance is a type of employee benefit that provides life insurance coverage to a group of employees, often saving money on premiums. Group life insurance pays out a benefit if an employee dies, which goes to their designated beneficiary. Group life insurance is an incredibly cost-effective type of employee benefit.
What is long-term disability insurance?
Long-term disability insurance is a type of employee benefit that provides income replacement if an employee is unable to work due to a long-term disability, such as a chronic illness or injury. This can be a good option for riskier jobs, to make them more appealing to prospective employees.
Long-term disability insurance typically provides coverage for a longer period of time than short-term disability insurance. This can be from 2-5 years or until retirement age. There may be a waiting period before benefits begin, and the amount of the benefit may be a percentage of the employee’s salary.
Can I make changes to my employee benefits during the year?
Generally, changes to employee benefits can only be made during the open enrollment period, or during onboarding. The open enrollment period usually only comes once a year.
However, there may be exceptions, such as if there is a change in personal circumstances including the birth of a child. In these cases, employees may be able to make changes to their benefits outside of the open enrollment period.
What’s the best type of employee benefit?
This depends on individual needs and preferences. When it comes to health insurance, a comprehensive health insurance plan with a wide network of healthcare providers, affordable premiums, and low deductibles and copays is considered to be a good option.
According to Ben Kettle from consumer lending start-up Dime Alley, “You should consider coverage that could give your company an edge, such as preventative care services, prescription drug coverage, and mental health coverage. Depending on the average age of your employees, you might want to consider different perks.”
Another type of highly valued employee benefits are employer-sponsored retirement plans, including 401(k) plans. These plans allow employees to save up for retirement and may offer matching contributions from the employer.
