Let’s talk benefits!
Are you thinking about adding private practice employee benefits? It doesn’t have to be complicated.
As an employer it can be hard to not go overboard (also known as over-budget) with an employee benefits package. 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 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? 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 for your private practice employees, let’s dive into examples of what those benefits actually are!
Health Care Benefits
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, an alternative to health insurance could be to offer a QSEHRA benefit through a service likewww.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.
Retirement benefits
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)
SIMPLE IRA
401k (Safe Harbor)
Solo 401k
SEP
It’s a great time of year to start a new plan for 2023! For most of the plans above, it’s too late to create a new plan for 2022. Wondering which plan might be a good fit for your business? It’s just one of the many things we help our clients with! (Your financial planner should also be able to help.)
Several states mandate that employers of a particular size offer a retirement plan. The minimum number of employees can range from 1 to 25+. When that is the case, there is usually a state-run option available at little or no cost to the employer.
Vacation Time (Paid Time Off or PTO)
Vacation time can be a great option for helping your team keep a good work-life balance. This is a benefit that can be scaled based on your budget and easily adjusted year-by-year: start small and add more vacation as time goes on. Managing a vacation benefit is actually fairly straightforward.
So how do you set it up? Base vacation time on the average clinical rate or the admin rate (depending on what’s allowed in your state), 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.
It’s important to note that a few states, counties and cities have a minimum sick leave requirement. When that’s the case, you’ll have to offer at least the minimum requirement. It’s always good to have an HR pro or employment attorney in your corner to keep you up to date with the requirements in your area.
Life Insurance Benefits
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.
Disability Benefits
There are two different types: short-term and long-term. Short-term disability covers a specific amount of time, usually three to six months. There is typically a waiting period between the first day of disability and when short term disability benefits can be collected, usually within 3-10 days.
Long-term disability picks up where short term coverage ends. It covers your employees if they are out of work for an extended period of time, usually 3-6 months, and until any government disability benefits would provide coverage.
Continuing Education Units (CEU) Reimbursement
Continuing Education reimbursement is a lower cost benefit that can really appeal to your employees. This can be offered as an annual stipend for employees to take CE courses of their own choosing.
An alternative to offering individual reimbursement, employers can purchase digital courses or offer live training to the staff as a whole. This gives you control over the specific areas of training your employees receive, while still providing a valuable benefit to your employees.
Unconventional Benefits
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 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!
These are the basics of offering benefits to your private practice employees! They can be as traditional or out-of-the-box as you need them to be based on your practice culture and your ability to fund the benefits.
Have more questions about employee benefits? GreenOak Accounting can help you make a plan that makes sense for your practice. Schedule some time with us 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