Are you a small business owner looking to retain talent? While compensation increases help, there are often better ways to keep your employees happy, like an employee group benefits plans.
Did you know that 8 in 10 employees prefer benefits more than a salary increase?
The equation is simple: If you do not offer a good employee benefits package, you will have a hard time keeping your employees engaged. And with happy employees being up to 13% more productive, a lack of group benefits package can hit your business where it hurts most, the bottom-line.
Keep reading to explore the common types of group benefits for small businesses and why you should offer them.
Types of group benefit plans
There are many types of group benefit plans. The most common include:
- Group Life Insurance
When an employee passes away, life insurance provides a lump sum payout to their beneficiaries. With group life insurance, your employee can rest easy knowing that their family will be financially supported if something unfortunate happens.
There are two types of life insurance: term and permanent. Term life insurance lasts a limited time, whereas permanent life insurance does not have an end date. Most group life insurance plans (if not all) include permanent life insurance.
The main benefit for your employees, apart from you shouldering all or part of the insurance cost, is that they can get coverage without undergoing extensive medical underwriting. Since group life policies do not require a medical exam, even employees with a medical condition, who otherwise might not qualify for coverage, can get life insurance.
- Group Disability Insurance
If an employee is unable to work due to injury or illness, group disability insurance provides temporary financial help in the form of regular salary payments. A disabled employee is paid a percentage of their pre-disability salary, often between 60 and 85%, until the payout term expires or they return to work.
There are two types of disability coverage:
- Short-term disability usually pays cash benefits for a few weeks, although some plans offer financial assistance up to two years.
- Long-term disability provides financial assistance for a longer period, such as 2, 5, or 10 years, or until retirement age. Generally, the longer the payout period, the greater the cost of insurance.
- Group Critical Illness
If an employee is diagnosed with a serious disease, critical illness provides a one-time monetary reward. You can offer group critical illness insurance as a separate benefit or as part of a group life insurance policy.
Plan participants are not required to take a medical test to confirm eligibility, as is the case with group life insurance. Your group critical illness policy may cover only a few major illnesses (5 or 6) or a large range of medical issues, depending on the policy (up to 36).
- Group Health Insurance
Group health insurance helps employees cover medical costs that their provincial health plans may not pay for, including, but not limited to, hospital, dental, vision, certain prescription drugs, ambulance and paramedical services.
- Group Accidental Death & Dismemberment
Accidental death and dismemberment coverage offers financial assistance if tragedy strikes. It pays a lump-sum amount if an employee dies or suffers a loss of limbs or senses due to an accidental injury.
- Health Care Spending Accounts (HSAs)
A health care spending account (or HSA) is a simple and effective way to offer tax-free health and dental benefits to your workers. Think of it as an individual employee account with a fixed dollar limit (set by the employer) that pays for a wide range of medical expenses incurred by an employee and his or her dependents. The health and dental benefits are fully tax-deductible to employers and fully tax-free to employees.
- Employee and Family Assistance Program
If an employee or his or her dependents face issues related to mental health, this program gives them access to short-term counseling.
How can group benefits help my small business?
Here are some of the main reasons why as an employer you should offer group benefits to employees:
- To attract and retain talent
In-demand workers expect to be paid competitively, but money isn't always the only reason why they choose one employer over another.
If a potential hire has more than one offer, how do you convince them yours is a better place to work? How can you compete with organizations that are larger than yours? Or compete with perks such as a flexible work schedule or extra vacation?
One answer is through a good benefits package.
Top talents want to work with companies that take good care of their employees. Having a well-thought-out and complete benefits program is the best way to show potential hires and current employees that you value them.
- To protect your workers
As an employer, your employees are your greatest asset. Even though Canadian health care offers your employees some level of protection, it does not cover many expenses associated with accident-related emergencies and long-term illnesses. Making sure your workers and their dependants are protected and healthy is a sound long-term investment — one which your employees will surely take into consideration before switching jobs.
- To reduce absenteeism
If workers can't get good health care, they may go to work even when they're sick and overwork themselves.
The result? Lower productivity, unfilled orders, missed deadlines, and unhappy clients. Or a worker may eventually end up getting sicker and needing a longer period to recover than if they had consulted a physician immediately at the onset of their illness. Worse, a sick employee may infect their co-workers.
A full benefits package includes a variety of tools and resources for different health problems, such as counseling for mental health, chiropractic care, or massage therapy. Whatever the health problem, employees can promptly get the help they need, which speeds up their recovery and return to work.
- To build morale and loyalty
Employee turnover costs can be high, especially for small businesses. Replacing quality employees is never easy and almost always requires both time and money. As you work to take your small business to the next level, keeping good employees can be very important to the success of your business.
A benefits and wellness program fosters a healthy work culture. It shows employees that they are more than just a number for you and that you care about them. When employees feel valued, they work harder. They are also less likely to change jobs.
- To reduce tax liability
You can write off the money you spend on group health and wellness benefits as a business expense.
Why should my business have group benefits?
There are many reasons why a well-designed group benefits package is a sound investment. To summarize, employee health benefits:
- help attract and retain top talent
- help improve productivity
- help boost loyalty and reduce absenteeism
- ensure your employees feel valued
- lower your tax liability.
Your employees want group benefits, perhaps even more than a pay hike. A comprehensive benefits package is not necessarily expensive. Plus, it is a long-term investment. It ensures the wellbeing of your workers and will motivate them to work harder.
Health insurance, life and critical illness insurance, disability insurance, and health care spending accounts are all group benefits that your business should think about.
Dundas Life works with some of the best companies in the Canadian insurance industry and can help you buy the right kind of group health, life, and disability insurance at the most affordable rates. Reach out to us today to learn more about group benefits options for your employees.