February 4, 2021
Salary is just the starting point when it comes to employee benefits. In order to attract top-notch talent, you also have to offer top-notch benefits, including health insurance, competitive sick and vacation time, retirement options, and more.
By building a comprehensive slate of benefits, not only will you attract great candidates for open positions, you’ll be able to retain your best talent as well. Sixty percent of workers told Aflac they would be willing to take a lower-paying job with great benefits.
According to a 2018 Clutch survey the most important benefits to employees include:
Health insurance can be a big cost for a small business. According to Kaiser, in 2020, the average cost of premiums for a single worker was $7,470, and the average cost of premiums for a family was $21,342. While individual employees do shoulder some of that burden, as an employer, you can expect to contribute 83 percent toward the cost of premiums for a single worker and 73 percent toward the cost of premiums for a family.
With those rates in mind, here’s what you need to know about purchasing group health insurance.
As a small business, if you have 50 or fewer full-time employees, you are not required by law to provide health insurance to your employees. However, most full-time employees do expect their employers to provide health insurance, so if you don’t, you could be losing great potential employees to employers that do provide those benefits.
The Affordable Care Act created the Small Business Options Program to help small employers find coverage for their staff, and by shopping through that program, you can qualify for the Small Business Health Care Tax Credit, which can help lower premium costs.
Types of plans
When choosing a group healthcare plan for your employees, you will probably have to decide between a PPO plan or an HMO plan.
A PPO is a Preferred Provider Organization, and the main pro of this option is the wide range of hospitals, doctors, and other specialists who are enrolled in the network. Your employees also won’t have to get a referral to see a specialist. There is a range of deductibles available for PPO plans, but smaller deductible plans — which employees often prefer — tend to be costly for employers.
An HMO is a Health Maintenance Organization. If you choose this option, your employees will be restricted to a small network of doctors and will need to see a primary care doctor in order to get a referral for a specialist. However, premiums and deductibles are lower for employers and employees. If you’re particularly price-sensitive, an HMO plan might be the way to go.
After choosing a healthcare plan, you might decide to add on additional bells and whistles like dental and vision insurance. Often times, dental and vision benefits can be added to the general health insurance plan you chose. The cost is usually nominal compared to general health insurance. If your chosen health insurance plan doesn’t offer dental or vision options — or if the options are pricier than you’d prefer — you can also purchase standalone dental and vision plans.
FSAs and HSAs
One health insurance-related perk your employees will probably want is an HSA or an FSA. The type of account your employees are eligible for depends on whether or not you choose a high deductible insurance plan.
An HSA is a health savings account, which employees can contribute to on a pre-tax basis and use to pay for any medical expenses. HSAs are only available for high deductible health plans, so the savings account functions to make sure employees have money to cover that deductible.
HSA money can grow in the account until employees turn 65, and then it can be used as additional income in retirement. Before the age of 65, employees can withdraw money for non-medical purposes, but they have to pay a 20 percent penalty.
An FSA is a flexible spending account, which employees can contribute to and use for medical expenses, with the perk that contributing lowers the employees’ taxable income. FSAs are not associated with high deductible plans. Unlike an HSA, FSA funds don’t carry over and grow from year to year. Employees can carry over $500 to the next year or be required to spend all the funds within 2.5 months, depending on the terms of the account.
Employees with FSAs can also use them to contribute pre-tax money for dependent care, making the accounts a prize for working parents.
Though a few states have laws mandating vacation and sick leave, there is currently no federal law requiring employers to provide it. However, like health insurance, these are benefits that your full-time staff will expect.
Typically, the longer an employee has been with the company, the more vacation days they have at their disposal. According to the Bureau of Labor Statistics, the average number of vacation days for an employee with a one-year tenure is 10 days. A worker with a five-year tenure has an average of 15 vacation days, while those with two decades of seniority have an average of 20 vacation days.
When it comes to sick days, the average worker can expect 7 or 8 sick days, depending on their tenure at a company.
While it’s not standard to offer part-time employees vacation and sick leave, going above and beyond in that respect can attract top talent and lower your turnover rate.
Part-time employees who have the ability to take time off when they need a break will be less stressed and happier in their positions, and adequate sick leave will discourage employees from coming in when they’re ill because they are afraid to lose income.
One recent trend is “unlimited time off.” While the policy is flashy and can decrease the administrative burden for your businesses, actually implementing it has some pitfalls. Many people actually take fewer days off under an unlimited policy, and it can create tension if staff members think others are abusing the policy. Another tactic could be to require staff members take a minimum number of days off, or require them to take at least five consecutive days off every year.
If you want to show your employees that you’re invested in them for the long-term, offering a retirement savings plan is a great way to do it. Many employers provide 401(k) plans, which allow employees to defer their salary at high levels, and also lets employers contribute to the plan.
One perk you can offer on top of the retirement plan is matching, which incentivizes your employees to save more. According to Vanguard, the average employer match benefit is 4.3 percent, but it frequently breaks down to a dollar-for-dollar match on the first 3 percent and a 50-cent-per-dollar match for up to 6 percent. Matching your employees’ contributions to their retirement plan also has the benefit of being tax-deductible from your income.
When choosing a 401(k) plan for your employees, look for features like:
Health insurance, paid time off, and retirement benefits will cover your employees’ bases, there are some additional perks you could offer to sweeten the pot.
Disability insurance means that employees will get a partial wage replacement if they become sick disabled. This is often broken down into short-term disability, which will cover employees for a few weeks to up to a year, depending on the plan, and long-term disability, which can be paid out after a number of years.
Disability will cover part of your employees’ pay during pregnancy and parental leave, so this perk will make your company more attractive to working parents.
If you can’t afford to pay disability premiums, you can still facilitate the purchase for employees who want that safety net in place.
When you offer life insurance, your employees will pay a premium so that a designated beneficiary can receive a payment if they die. Life insurance can cover things like funeral expenses, medical bills, and other debts so the family doesn’t have to worry about those costs.
With life insurance, your employees can have peace of mind if they are concerned about the well-being of their family in case something happens to them.
Employee assistance program
An employee assistance program (EAP) can address issues in employees personal lives that could be affecting their performance at work, including things like:
By providing your employees an EAP, you show them that you care about their physical and emotional wellbeing, and you can potentially decrease distractions that are hurting productivity.
In order to attract ambitious, intelligent employees, consider offering a tuition reimbursement program. By paying for staff to go back to school, you can reap the benefits in the form of more knowledgeable employees.
You can put certain conditions on the benefit, like only enrolling in programs that relate to the pharmacy, defining a cost cap, and requiring a specific grade-point average. Tuition reimbursement also has the benefit of being tax deductible up to $5,250.
Helping with childcare costs can make your pharmacy more appealing to parents. You can do this by either negotiating discounts for childcare with local providers or giving money directly to the employee so they can arrange their own childcare.
You have the potential to earn a substantial tax break when you subsidize childcare — you can deduct up to $150,000 for employee childcare every year.
And remember, offering a flexible spending account will also help your employee cut childcare costs.
The Family and Medical Leave Act requires businesses to give workers 12 weeks of unpaid leave to take care of a new baby, but consider adding an additional paid parental leave benefit. A parental leave policy ensures that employees don’t have to rely on banked PTO or disability insurance during a time of intense change.
A generous parental leave policy would cover both parents — not just mothers — and include paid leave for families adopting a baby. New fathers typically take half as much leave as new mothers, and a gender-neutral policy can help repair that imbalance. Paid parental leave policies can range from six weeks to six months, depending on what is feasible for the individual business.
For employees who have a long trek every day to your pharmacy, you can ease their daily burden by offering transportation benefits. Paying a certain mileage reimbursement is most common, but other perks you can offer pre-tax include providing local transit passes, paying for parking passes or parking fees, and vanpooling.
Other, non-tax-deductible ways you can assist include providing gas cards or fuel discounts, reimbursing toll payments, and paying for bicycle repair.
One way to demonstrate you’re invested in the long-term wellbeing of your employees is by supporting their professional development. Create a library of professional resources — like online trainings and tutorials — and schedule regular on-site educational opportunities for staff to learn about new developments in their field.
Let your staff know you have funds available for them to seek out continuing education opportunities so they can expand their knowledge beyond their on-the-job experiences.
Generous workplace perks can make employees excited to come into work and be more productive. Some companies provide lunch to all employees, whether it’s every day or a couple of days a week. This can improve morale by bringing people together, and it makes employee’s lives easier by giving them one less thing to worry about when preparing for their work day.
Perks like allowing jeans or creating an outdoor sitting area are low-cost ways to make the pharmacy more relaxing. You can also show that you respect your employees’ time with a “work-life separation policy” that says you won’t contact them outside of work hours unless it’s a true emergency.
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy side of their business. The member-owned company serves independent pharmacies with group purchasing services, expert contract negotiations, proprietary purchasing tools, distribution services, and more.
An HDA member, PBA Health operates its own NABP-accredited (formerly VAWD) warehouse with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products.
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