A Proper Assessment Program
A proper assessment program should be conducted to determine the best employee benefits is based on the needs and wants of the employees. The assessment program includes an employer’s thought of employee benefits needs, competitor’s benefits practices, and tax laws and regulations. In an assessment program, it is important to take a market research approach to employee benefits planning.
The Organization should examine the existing employeesstatistics in discovering the needs of various categories of employees. Employers can analyze the needs of the employee and compare them with any existing benefits and against existing benefits to categorize which benefits will be most helpful in achieving the objectives of the benefits program.
What Is An Employee Benefits Plan
An employee benefits plan is the portion of an employees’ compensation package that covers benefits like medical insurance, retirement plans, life insurance, paid time off and educational assistance programs. While most employers comply with laws mandating benefits like worker’s compensation, unemployment insurance and Social Security contributions, additional benefits are often voluntary. Employee benefits plans outline all the welfare or pension options available to employees. Because benefits plans can vary so greatly between employers, plans’ inclusions often depend on a company’s budget, goals and employee needs.
Learn More About Employee Benefits Planning
Employee benefits planning is designed to accomplish several important goals. It can provide workers and their families with financial protection in the event of an illness, injury, death, disability, or unemployment. It also acts as a recruitment tool and can help keep employees happy and productive. For more information about employee benefits planning, contact an employee benefits consultant at BBG Broker.
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Is Hazard Insurance Tax
When it comes to business insurance in general, the IRS stipulates that it’s a part of the cost of doing business and therefore tax-deductible. In the case of whether hazard insurance is tax-deductible, there are some additional points to consider.
The IRS allows you to deduct home office expenses if you run a home-based business. While this includes items such as utility expenses and home office equipment, it can also include your insurance premiums. For instance, if 50% of your home is used solely for the purpose of operating your business, you can deduct 50% of your yearly hazard insurance premiums.
You may also be able to claim deductions in the event that your business experiences losses in federally declared disaster areas. For example, if you file a claim on your hazard insurance and your insurance company only pays a portion of the amount, you can deduct the remaining amount minus $500 per incident.
If you’re unsure whether hazard insurance for small business is tax-deductible, it’s a good idea to work with a professional who can help ensure that you’re taking advantage of all the tax deductions your business is eligible to claim.
What Types Of Employee Benefits Are Most Appreciated Among The Different Generations
Different generations of workers want different things. Weve already seen this in our article about generational differences in the workplace.
As each generation is in a different stage of their lives, its no surprise that they tend to appreciate different types of employee benefits. After all, young Millennial parents have other priorities than a close-to-retirement Baby Boomer, right?
The Benify study separates employee benefits into two categories: those that employees find most important and those they most appreciate. Lets see what the overview looks like per generation.
Two things immediately stand out when we look at what benefits people find important. The first and perhaps the most obvious one is the fact that pension plans gain in importance as the generation gets older. This is something that makes sense as graduates who just entered the workforce probably wont be thinking about their retirement in 40+ years yet
The second thing worth noticing here is skills development. Unsurprisingly, the development of new skills is more important for younger generations as they will be more affected by technological developments than it is for Baby Boomers.
Something thats important for all employees, regardless of their age, and that tops almost every list, are working hours and leave.
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How Does Virgin Pulse Fit In To Employee Benefits
Virgin Pulse provides versatile benefits solutions to employers by utilizing culture-first technology. This unique approach allows Virgin Pulse to meet you where you are on your wellbeing journey, and evolve with you and your business. If you already have wellbeing programs in place, Virgin Pulse can help you unify them through HR programs, tools and added benefits. Our purpose is to make your programs accessible through a seamless and dynamic employee communications and benefits portal. With Virgin Pulses culture-first technology, your business is sure to see improved personal and business outcomes.
Too often, employers have valuable benefits that go unused because employees are overwhelmed by the volume of information. Virgin Pulses Hub solution provides the perfect platform for providing a personalized benefit experience that presents options based on each of your employees individual needs, interests and eligibility.
Main Types Of Employee Benefits
A comprehensive employee benefits package gives you a competitive advantage in the current workforce market. It can be the ultimate argument for talented recruits to choose you over a competitor.
Having the right mix of benefits is essential for you and your employees, but what does it look like?
First, there is no one-size-fits-all recipe that will satisfy everyone. The list of benefits is fluid, constantly changing, and adapting to the workforce environment.
Typically, most benefits fall under one of the following four types of employee benefits:
- Benefits at work
- Financial benefits
- Lifestyle benefits
This list is basic however, with it can grow. Let’s dive in and look at different examples of employee benefits.
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For Further Information Contact:
Department of Labor, Elizabeth Schumacher or David Sydlik, Office of Health Plan Standards and Compliance Assistance, Employee Benefits Security Administration, at 202-693-8335, and Thomas Hindmarch, Office of Regulations and Interpretations, Employee Benefits Security Administration, at 202-693-8500 or William Fischer, Department of the Treasury, Internal Revenue Service, Office of Chief Counsel at 202-317-5500.
What Is An Employee Benefit Plan Audit And Why Is It Important
An audit is a critical feature in the process of establishing credibility and assurance that your employee benefit plan is in compliance with applicable laws and regulations.
Hiring an independent certified public accountant to audit your financial statements to ensure your plan is adhering to relevant legislation is standard practice when your plan reaches certain participant count thresholds. The conclusion of the audit will provide credibility that your plan will have the funds available to pay benefits to respective participants when these benefits become due.
Generally, if your plan has more than 100 eligible participants, an audit requirement is triggered. Its important to understand what an employee benefit plan audit entails and why its a crucial step in satisfying your companys responsibility of filing a complete and accurate Form 5500thus, avoiding potential costly penalties for your company.
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Share Your Plan With Employees
Effectively communicating offerings can help employees understand their options and get the most use from their plan. If you collected feedback from your employees to help you decide what plans to offer, you can tell them how their input influenced your decisions. This can increase their support of the benefits and help them feel heard and valued. There are some legal requirements for how to communicate your plans to employees, but consider going further. Successful communication can help you improve employee moral, encourage increased employee retention, attract high-quality candidates and reduce confusion surrounding the benefits package.
Here are some helpful strategies for communicating information about your plan:
Create awareness: The first step to successful communication is creating awareness of your new package. Consider announcing the change in a company-wide meeting or introducing important points in an email to employees.
Ensure understanding: You can ensure your employees understand their plan’s benefits by creating informative resources for them to review or providing a company-wide training. This can encourage plan recipients to use their benefits wisely.
Be available: Employees may have questions about their plans. Being available to answer questions and resolve concerns can improve employee reception to the plan.
How Much Do Employee Benefits Cost
One of the most important things to figure out when building out your benefits package is the cost. Examining the costs and value gained for each employee benefit can help you decide what to include in your plan.
According to a U.S. Bureau of Labor Statistics report5, employee benefits comprise 31% of total compensation costs. Insurance benefits made up 8.3% of compensation costs, and legally required benefits accounted for 7.1%.
What can seem like a financial burden at first might actually save you money in the long run. For example, a UnitedHealthcare survey6 found that 62% of participants in wellness programs say their productivity has improved, and 56% have had fewer sick days.
These programs are known to boost morale, but they also help you avoid indirect costs, like missed work due to illness and lower productivity.
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Employee Benefit Plan Audit: What It Is & Why Is It Important
What is an employee benefit plan audit, and how can it help businesses? This is an important question. An audit is essential to ensure that your employee benefit plan complies with all applicable rules and regulations and to comply with Department of Labor requirements.
The primary goal of ERISA is to safeguard EBP participants and their benefits. ERISA guarantees that EBPs follow guidelines that protect the employee benefit plan administrators from misusing plan assets.
When your plan reaches a certain participant count, its time to hire a certified public accountant to audit financial statements to ensure your plan is compliant with regulations. In general, an audit is required if your plan has more than 100 participants as of the beginning of the plan year. The audited plan financial statements are filed with Form 5500 on an annual basis and are subject to DOL and IRS review. Form 5500 is part of ERISAs comprehensive reporting and disclosure framework designed to verify that EBPs are managed and operated in accordance with relevant standards and procedures. The main goal of this system is to deliver crucial information to participants, beneficiaries, and regulators to preserve beneficiaries and participants rights.
It is critical to carefully follow each stage of this process because if Form 5500 is not filed on time, or the submission is refused, a fine may be levied until the filing is completed accurately.
Use Technology To Your Advantage
Finding an intuitive online portal thats easy for your employees to access and navigate is important to help them understand what they can do with their benefits package. If you make it easy to enroll and make changes down the line, employees will feel in control of their benefits.
Most traditional benefits, like medical and retirement plans, can be viewed and managed through online portals, Shubat said. The next wave is making all benefits and services available through digital platforms. Most companies dont have those tools in place right now, but its becoming more and more common every day.
Technology can help employers, too. By using the analytics provided by these tools, you can gain a better understanding of your employees needs and whats working.
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Defined Benefit Plan Vs Defined Contribution Plan
Think of defined contribution plans as the new kid on the block, and defined benefit plans as the old pro. A defined benefit plan primarily requires employers to make nearly all contributions while a defined benefit plan expects employees to make most of the contributionseven though many employers may choose to provide some matching contributions.
While defined benefit plans generally guarantee either a monthly payment or set lump-sum payout, depending on your salary or how long you remain with a company, defined contribution plan payouts arent guaranteedthey depend on employee contributions and the performance of the underlying investments. Defined benefit plans offer greater assurance of some returns, although you could achieve higher earnings by managing your own retirement funds.
Defined contribution plans are much more common than defined benefit plans, with 43% of private sector, state and local government workers participating in one. While they are no longer common among private companies, defined benefit plans remain prevalent in state and local governments, with 76% of public employees participating in a pension plan.
Ask Employees What They Want
Yaniga emphasized the importance of knowing your employees and finding out what benefits they really want.
The more we understand about the benefit priorities of our employees, the more we can meet them at their priorities, Yaniga said. Best-in-class companies build a great culture by applying all they know about their employees priorities to their benefit structures.
Key takeaway: Benefits should be flexible, easy to access and desirable for your employees.
Additional reporting by Nicole Fallon-Peek. Source interviews were conducted for a previous version of this article.
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What Are Popular Types Of Employee Benefits
You may be asking yourself, What employee benefits do people value the most? The simple answer is that it depends on what type of employees youre looking to hire.
Finding the right combination of benefits that will have the most impact while not breaking the bank is critical for your businesss success.
Popular benefits in the U.S. vary depending on employee makeup, industry type, and other factors. But checking out a list of common benefits most companies offer is a good start.
When designing your employee benefits package, it never hurts to investigate what your employees specifically want. 65% of employees even say they would value being able to choose their own benefits. Therefore, you may consider asking for employee feedback via an online survey to poll for customized benefit ideas.
Additionally, some employers create benefits packages according to the demographics of their workforce. For example, employers may offer a student loan repayment benefit to attract and retain millennials.
How To Manage Employee Benefits Effectively
Now you know what employee benefits are and why they are so important, let’s see how to manage them effectively. Here are five things to consider:
Step 1. Hire a dedicated employee benefits specialist
This person will help you find the best benefits package based on your employees’ needs, calculate expenses and gains, and even negotiate prices for certain benefits.
Step 2. Find the proper software
In the current advanced technological era, it is difficult and unnecessary to manage benefits packages without the help of computers. An employee benefits software provides details regarding the employees’ benefits reports, export reports and administers overall benefits.
Step 3. Keep track of benefits and costs
It is the finance department’s responsibility to measure the benefits costs. Nonetheless, HR must keep track of fluctuations in expenses and gains. This data is vital to crafting your long-term benefits strategy.
Step 4. Describe the benefits in your Employee Handbook
Benefits will not be valuable if employees don’t know they have them. Include a chapter in your Employee Handbook to provide essential details on your company’s offer.
Step 5. Monitor employees’ wishes and needs
Employees’ needs may change. If honest communication is one of the core values of your company culture, ask your employees what motivates them to bring their best at work. Listen and make changes when needed.
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Defined Benefit Plan Payment Options
When it comes time to collect your retirement, you usually receive payment in the form of a lump sum or an annuity that provides regular payments for the rest of your life. Deciding between the two can be a difficult decision, especially since there are different ways an annuity could be structured:
Single life payment. You receive a monthly payment for the rest of your life, and if you die, your beneficiaries receive no further payments.
Single life with term certain. You receive a monthly payment, and if you die before the specified term is over, your beneficiaries receive payments for a preset number of years.
50% joint and survivor. When you die, your surviving spouse will get monthly payments for the rest of their life that are equal to 50% of your original annuity.
100% joint and survivor. When you die, your surviving spouse will get monthly payments for the rest of their life that are equal to 100% of your original annuity.
Adding more stipulations to your annuity usually means youll get lower monthly payments. But if youre in good health and expect to live a long life, youll usually get the most benefit from choosing annuity payments.
If youre in poor health and expect a short retirement, a lump sum may be the best way to go. You may also choose to take a lump sum payment and invest it or use it to buy an annuity of your own.
How Warren Averett Can Help
Whether your plan has been audited by the same firm for 10-plus years or whether your plan has just met the initial audit threshold, Warren Averett is here to help. Reviewing and assessing your auditors qualifications is an important part of the audit process as well as a fiduciary function. Warren Averett conducts audits for more than 300 employee benefit plans on an annual basis. Our team members are experts in auditing standards, the Securities and Exchange Commission regulations, and the Department of Labor and Employee Retirement Income Security Act filing requirements.
We are committed to helping clients manage their employee benefit plans with the utmost credibility and confidence. Contact us today for more information on how we can help your business.
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