Employee Benefits Made Easy!
Let’s talk benefits!
As an employer it can be hard to not go overboard (also known as over-budget) with employee benefits. But you don’t want to slash the benefits either! It’s worth really thinking through since they can become a long-term commitment. In this article we’ll walk through some things to consider before taking the plunge.
My #1 piece of advice would be to make sure you can afford whatever you decide to do! It’s better to offer fewer benefits now, than to have to revoke the benefit later when it’s draining your bank account. No one wants to have that awkward conversation.
So what can you do to find that happy medium? Not everyone realizes this, but you can simply add benefits one at a time. You don’t have to add everything all at once! If you start small, you won’t have to take away benefits when you’re in over your head. Instead, you add more benefits later on!
You can also consider asking your team what matters most to them. Be open with them too! It may surprise you what benefits they value over others. And moving forward, if you are hoping to attract a certain kind of employee, you can tailor your current benefits to potential employees. What benefits would tempt them to make the move to your practice?
Now that we’ve touched on how to approach benefits, let’s dive into what those benefits actually are!
Probably the first benefit that comes to mind is health insurance. This is a tax-free benefit to your employee which is GREAT for you! Health insurance benefits can be offered through a broker or through payroll. Most employers offer to pay 50% of the employee’s premium, while the employee pays 100% to add dependents. That could be great on paper, but you’ll need to do a census to see how much that will actually be–so you understand the long-term commitment.
If you have less than 50 employees you could offer a QSEHRA benefit through a service like www.peoplekeep.com. You set an allowance amount for employees and they pay for their own health insurance, copays, and prescriptions. Then they submit the receipts to the plan for reimbursement until they max out the allowance. If you go this route, expect a base monthly fee + a fee for each employee per month to run the program, as well as the cost of the reimbursements.
Not all retirement benefits are created equal–there is a wide range of options. In order to offer this benefit you’ll most likely need an accountant, a financial planner, or a payroll company.
And yes, we’re not kidding, there are SO MANY options for plans:
SIMPLE 401k (for <100 employees)
401k (Safe Harbor)
It’s a great time of year to start a new plan for 2021, for most of the plans above it’s too late to create a new plan for 2020. Wondering which plan might be a good fit for your business? It’s just one of the many things we help our clients with!
Managing a vacation benefit is actually fairly straightforward. You can start small and add more vacation as time goes on.
So how do you set it up? Base vacation time on the average clinical rate or the admin rate, and then decide on an appropriate number of hours to offer. Don’t forget to RUN THE NUMBERS! Make sure it can actually work so that you’ll still come out on top. This can’t be stressed enough. Remember that this is a benefit, so it really is just the cherry on top. Don’t feel guilty if you can’t make it work right now. Most small practices offer ZERO PTO so even if you only offer a little, it’s better than nothing.
Life insurance is a great benefit and it’s not particularly expensive; however it’s not usually going to be the first thing you add. If you offer your team a $50,000 policy, it’s not taxable to your employees. Anything above that WILL be taxable.
There are two different kinds: long-term and short-term. Long-term disability covers your employees if they are out of work for less than 6 months. While short-term disability will cover them for a short period of time, typically with a waiting period.
But what if you don’t have very much money to put toward benefits?
We are all about getting creative. Little things can make a big difference! We’ve seen businesses start lending libraries, offer an anniversary vacation day, or give tickets to the zoo or botanical gardens! You could also reimburse continuing education, or comfort items for virtual sessions (how about a standing desk or some blue light glasses?).
Spa day? Bowling? A birthday bonus? Think outside the box if you have to.
Some of these unconventional benefits are taxable to your employees, so just make sure to check with your accountant first!
So those are the basics of offering benefits to your employees! They can be as traditional or out-of-the-box as you need them to be. GreenOak Accounting can help answer any other questions you may have, so schedule some time to speak with a member of our team today.
This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney or advisor regarding your particular facts and circumstances. GreenOak Accounting is an accounting firm that specializes in working with counselors and therapists in private practice. We provide monthly accounting & bookkeeping services, 1-time services and online courses. For more information on our specialized services for therapists please visit www.greenoakaccounting.com