Running a small business comes with its set of challenges. Apart from dealing with inflation and rising costs, you could be navigating supply chain issues or marketing strategies. But one of the biggest hurdles is hiring and keeping good employees.
So, what’s the secret to easing the load for both you and your business? Offering the right employee benefits. But what exactly does “right” mean? Well, it depends on your specific business and the unique needs of your employees.
Every business is different, with its own blend of people. From a handful of employees to a large crew, your team could span generations, cultures, genders, and abilities. This diversity is what makes your workforce vibrant. Recognizing that everyone has unique needs, especially when it comes to benefits, is crucial. Offering personalized benefit options allows your employees to choose what’s right for them.
Small Business Employee Benefits Package
Choice Is Valued
The latest yearly survey by the Society for Human Resource Management (SHRM) reveals six top picks in employee benefit categories. Those are health care (88%, down one percent from 2023), retirement savings and planning (81%, no change from 2023), leave (also 81%, no change), flexible work (70%, no change from previous year), family care (67%, down one percent from 2023) and professional and career development (65%, down two percent). Health insurance stands out as one of the most sought-after health care benefits (frequently a PPO or HDHP – often with a Health Savings Account, Health Reimbursement Arrangements, or Flexible Spending Account). Over 95% of employers also offer Dental and Vision insurance.
The 25th annual Kaiser Family Foundation (KFF) Employer Health Benefits Survey found nearly half (47%) of covered employees are enrolled in a PPO, one-third (29%) in an High Deductible Health Plan (HDHP), 13% in an HMO, 10% in a Point of Service (POS) plan, and one percent in an indemnity plan.
Keep in mind, KFF’s benefits survey numbers are based on a national study. In California, HMO participation is much higher. The California Health Care Foundation says the state’s largest insurer based on revenue is Kaiser Permanente, whose members are mostly enrolled in HMO coverage. In the Individual, Small Group, and Large Group commercial market, Kaiser Permanente has a near 50% share of enrollment.
When it comes to choice, no program in California offers you and your employees more ways to customize their coverage than CaliforniaChoice. That is why enrollment continues to grow since its doors were opened nearly three decades ago. Through June 2024, CaliforniaChoice has more than 382,000 members. With a choice of provider networks and ACA metal tiers, you have greater access to doctors, specialists, and hospitals with CaliforniaChoice than with any other single program available in California.
Affordability Is Important
Choosing the right benefits package is key for both employers and employees. For employers, it’s about striking the perfect balance to attract new talent and keep your top performers happy. For employees, it’s all about finding a plan that meets your or your family’s health needs while keeping your costs low. This includes what you pay in premiums as well as other out-of-pocket expenses like copays, deductibles, and coinsurance.
KFF found in its 2023 employer survey that most employers shared the cost of health insurance with their employees. On average, covered employees contributed 17% of the premium for single coverage and 29% of the premium for family coverage. At small businesses, covered workers contributed a higher percentage of the premium – 38% vs. 25% for family coverage.
A third of covered workers (30%) at small firms in 2023 were enrolled in a plan where the employer paid the full cost of coverage. This compares to just six percent of covered workers at large firms. Another third (32%) of workers at small firms contributed more than half of their family coverage premium, as compared to eight percent of workers at larger firms.
Coverage Must Meet ACA Requirements
The Affordable Care Act (ACA) aimed to boost health insurance coverage across the U.S. How? By mandating that Applicable Large Employers (ALEs) offer insurance to their employees. An ALE is defined as a business with 50 or more full-time and full-time equivalent employees. If you’re not sure if your business qualifies as an ALE, and is required to offer health insurance, there’s a Full-time Equivalent (FTE) Employee Calculator on the HealthCare.gov website.
In addition, ALEs must comply with required IRS annual reporting of information concerning your offering – or non-offering – of insurance to eligible employees. If you do not offer health insurance, your business could be subject to ACA penalties. For more information on potential penalties, refer to the infographic developed by the Kaiser Family Foundation for 2024.
If you offer insurance to your employees, it must also comply with regulations concerning Essential Health Benefits (EHBs) and Medical Loss Ratio (MLR) requirements. The MLR is based on how much the insurance company spends on members’ medical care and efforts to improve their care. If a small business plan spends less than 80% of its premium on specified costs, a refund might be necessary. (For Large Group plans, the MLR is 85%.)
Health Care and More
CaliforniaChoice can distinguish your business from others in your community by offering excellent health insurance benefits and much more. Members choose from dozens of coverage options from a variety of health plans. They can also take advantage of Dental, Vision, Chiropractic & Acupuncture, Life and AD&D, and Hearing care services. Plus, there are no-cost extras like an Rx savings card, discounts on fitness and wellness, travel, entertainment, and more. There are also benefits in the Business Solutions Suite that can save your business hundreds of dollars annually. These include Flexible Spending Accounts (FSAs) and Premium Only Plans (POPs) for your employees and COBRA or Cal-COBRA billing services.
To get more information, talk with your employee benefits broker about CaliforniaChoice. If you don’t already have a broker, it’s easy to search for one online.
