For a small business, offering benefits can be a stressful conversation. When it comes to competing with larger employers who have the resources to offer expansive benefits packages, it can be difficult to find ways to keep up and provide not only prospective employees, but your current employees as well, with the benefits that they want and need. While there are resources to find things like healthcare benefits that small businesses can offer, it doesn’t take away from the fact that benefits are both necessary and expensive. You want to be able to show your employees that they are valued and provide them with the things they need to ensure their personal life is as taken care of as their work life, but you also want to ensure you’re keeping your numbers in the black.
It’s a tricky balance, one that Payday HCM has seen many prospective and current clients go through. The cost of benefits and finding a benefits package that works for your business isn’t something to take lightly, and with an almost unlimited number of options at your fingertips, sorting through the noise and finding the true best-fit solution isn’t always easy. At Payday HCM, we want to ensure that, whether or not you are our client, you have the tools you need to make the best decision for your business.
That’s why, in this article, we’ll be going over worksite benefits, sometimes referred to as voluntary benefits, and how they might be a helpful addition to your company’s benefits package. We’ll go over what worksite benefits are, how they differ from a more traditional benefits package, and the cost of offering worksite benefits. By the end of this article, you’ll have all the information you need to get started (or continue on) your organization’s benefits journey.
In this article, you will learn:
- What Are Worksite Benefits?
- How Do Worksite Benefits Differ From Regular Employee Benefits?
- Cost Of Worksite Benefits
What Are Worksite Benefits?
Firstly, we’ll start with unpacking what worksite benefits are and the kinds of worksite benefits that are commonly offered.
Definition and Overview
Worksite benefits, also called voluntary benefits, are optional insurance and non-insurance benefits made available to employees through their employer. In most cases, these kinds of benefits come at a low cost for employers as they are typically heavily employee-funded. These benefits help employees cover a range of unexpected events and life circumstances that traditional benefits may not fully cover.
Voluntary benefits are usually offered as part of a comprehensive benefits package and can be customized based on employee needs. Of course, this doesn’t have to be the case: if you’re a smaller employer, one with five or fewer employees, worksite benefits can be a great option for providing benefits options to your employees without breaking the bank.
Common Types of Worksite Benefits
There is a whole assortment of different things that can fall under the category of worksite or voluntary benefits. Some common categories are:
- Life Insurance: Typically group term life insurance, with optional additional coverage. Some plans may include dependent coverage and the option to convert to individual plans upon termination.
- Short-Term Disability Insurance: Covers a portion of income if unable to work due to illness or injury, helping maintain financial stability during recovery.
- Accident Insurance: Provides financial assistance in the event of an unexpected injury. Benefits can help cover copayments, deductibles, and everyday expenses while recovering.
- Hospital Indemnity Insurance: Provides assistance for additional costs incurred during a hospital stay. Hospital indemnity insurance often provides payments directly to the person insured.
- Pet Insurance: Covers veterinary costs related to illness or injury, which can be especially helpful for employees with multiple pets or high-cost breeds.
How Do Worksite Benefits Differ From Regular Employee Benefits?
Next, we’ll look a bit closer at the differences between a more traditional benefits package and worksite benefits.
Voluntary and Employee-Funded
Unlike core benefits like health insurance and retirement plans, worksite benefits are typically voluntary and funded largely through employee contributions. This gives employees the flexibility to choose the benefits that suit their individual needs, and employers the ability to pick the right benefits for their business at a good cost.
Core benefits are also subject to different legal regulations, like the Affordable Care Act—depending on the size of your business, you may not fall within the ACA’s reporting requirements. Worksite benefits, then, can be a good option for small businesses still looking to offer their employees some kind of benefits.
Customizable, Portable, And Attractive
Worksite benefits are often customizable, allowing employees to select only what they need. They can also be adjusted during annual enrollment periods or following qualifying life events. Some of these benefits are also portable, meaning employees can retain coverage even after leaving their job, which is not always the case with traditional employer-sponsored benefits.
Offering a comprehensive benefits package is a great way to attract top talent, and worksite benefits can be a key component of that. Whether it’s a larger business offering a host of voluntary benefits on top of their traditional benefits package, or a smaller business offering a select number of worksite benefits, these things can help you stand out in a crowded hiring field.
Cost Of Worksite Benefits
Finally, we’ll go over the cost of worksite benefits and whether they are a good fit for your organization.
Employer Perspective
From an employer's perspective, worksite benefits are cost-effective. Since most are employee-paid, employers can offer a more comprehensive benefits package without significantly increasing costs. These offerings can enhance employee satisfaction and improve retention.
Providing a wide range of optional benefits shows that the employer is invested in employee well-being. It can also reduce absenteeism and boost productivity, as employees facing fewer financial and personal worries are more likely to stay focused and engaged at work.
Employee Perspective
For employees, worksite benefits offer value through group rates and convenient payroll deductions. Many plans feature guaranteed issue, making enrollment easier, especially for those with pre-existing conditions. The ability to access a wide range of protections without navigating the individual insurance market is a significant advantage.
Additionally, employees can pick and choose benefits based on life stage, financial goals, and risk tolerance. Younger employees might prioritize student loan repayment or identity theft protection, while those with families might opt for life insurance or hospital indemnity plans. This flexibility enhances the value of the benefits package.
A Benefits Package That Works For Everyone
Creating a benefits package that works not only for all of your employees but is also affordable is easier said than done. As a small business, this task can feel even more difficult considering all of the other costs associated with running a business. You shouldn’t have to decide between offering your employees a comprehensive benefits package and the success of your business. Luckily, with the information provided in this article, you’ll be one step closer to finding the path that will help you and your business achieve both.
Creating a benefits package is not only about choosing the right ones for your business and your employees; it’s also about finding the right broker to help you create the most comprehensive and affordable benefits package. Check out our article on the five features to look for in a benefits agency to ensure you’re making the right decision.
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