Fringe Benefits for Hourly Workers
Providing fringe benefits is at the heart of motivating employees, boosting recruitment, keeping top talent, and being competitive in the industry. From small companies to large enterprises, the way to a happier and more productive workforce is lined with high quality employee benefits.
The concern of any competitive and strategic company is knowing how to handle providing fringe benefits, and at the same time, maintaining profit. Healthcare coverage and other benefit plans can seem like heavy expenses for the company. But designing and incorporating employee benefits to the overall company strategy is possible with the right planning and help from a fringe benefits specialist like ARCHER JORDAN.
Steps in Effectively Providing Fringe Benefits
As you go through each step, it’s important to always remember your end goal. You want to make the benefits selection efficient so that the choice is as easy and as clear as possible for your workers. You’ll need to know:
- The kind of coverage to offer and to whom
- Deductibles and contributions
- Benefits technology and framework
1. Know what kind of coverage to offer
Employees have different priorities, and this can influence how attractive they view your fringe benefits plans. You can offer medical, dental, disability insurance, life insurance and more as part of your fringe benefits package.
Knowing what kind of coverage to offer means knowing what matters most to your current employees. The bare minimum under the law would be providing healthcare as an option. A retirement savings plan would also be an attractive prospect.
2. Determine who is covered for fringe benefits
If you employee part-time and full-time employees, then you need to establish who is covered for which kinds of fringe benefit packages. Even among your full-time employees, there may be differences in the value of the benefits you offer to your upper management workers and your front-line workers.
Some employees have their own individual health plans; others are covered by the plans of their spouses. These are all considerations you need to make when you determine who will be covered. It is important to determine how many employees you will be offering coverage to, and to estimate how many will actually participate.
3. Establish the requirements for employee benefits
Different benefits packages should have different rules for eligibility. Compared to a full-time employee, a part-time worker won’t be eligible for a full healthcare package. Factors such as number of hours worked in a week, number of years in the company, and position can all help you establish the requirements for employee benefits.
4. Determine premiums and deductibles
Cost is probably the most important factor in your mind as you design an efficient benefits plan. There are many options that can help decrease the cost on your employees and on your company.
You need to know the extent of cost-sharing that will come into play in the different benefits plans you offer. Premiums are the portions employers and employees pay for insurance costs. A lower total premium would mean less payment from you as the employer.
Deductibles are the amounts employees pay out of pocket before the insurance company begins covering expenses. A higher deductible means more payment from the employees and less cost from you as the employer.
5. Set up defined contributions
In a group health insurance plan, an employer usually has to cover at least 50% of the monthly premium; this is called a minimum contribution or cost-sharing percentage. Still, it is up to you to decide how high both the premium and the deductible should be.
A way to make this easier is to deal with defined contributions. Your employee would be supplied with a set amount to put towards the cost of his or her care, and this contribution would go towards the employee premiums. Because of this contribution, you can have a high-deductible plan.
Defined contributions can be set up by plan, or by benefits package.
Consult with ARCHER JORDAN, Your Fringe Benefit Expert
As a competitive business, you need to be smart about how you allocate your money in benefits packages. Working with fringe benefits can be a challenging and complex process, but ARCHER JORDAN can help you maximize your workers’ productivity and your company’s profit. Contact us today!