Mandatory vs. Voluntary Employee Benefits
Posted on: April 13, 2020 by iSure
In today’s tight job market, it is more important than ever to offer a competitive employee benefits package. However, creating a well-balanced bundle of benefits is a complex task. An effective benefits plan is dependent upon employee demographics, company size, and industry. Offering benefits that employees can’t access on their own will assist in hiring and retention efforts. In this article, we will explain the difference between mandatory and voluntary employee benefits.
Some benefits are required by law (mandatory), which are explained by Resourcing Edge:
Provides retirement income to employees
Compensates employees injured on the job
Protects employees’ wages from job loss
Family Medical Leave Act (FMLA)
Provides unpaid leave for medical needs (must have over 50 employees who have worked 1,250 hours in the 12 months prior to the leave)
Health Insurance Access
Applies to companies with at least 50 full-time employees
Voluntary benefits are non-wage compensation that the employer chooses to offer employees. They mainly focus on health, wellness, welfare, wealth management, and retirement. These benefits would typically be extremely expensive for employees if they purchased them outside the group plans provided by their employers. Even if employees must cover part of the cost, by banding customers together, you can get high-quality benefits and perks at lower costs.
Benefits Employers Desire
A competitive benefits package would consist of health insurance, disability/life insurance, and a retirement plan. Check out what your industry competitors are offering as well, to help set a benchmark.
The typical employee benefits package is valued between 25-40% of the employee’s base salary. The most common benefits are paid time off and health insurance, followed by retirement funding, overtime pay, paid medical leave and disability/life insurance.
Most employees even prefer benefits over a pay raise. Keep in mind that every organization and employee culture is unique. Instead of guessing what benefits your employees value, ask them directly via a survey.
The most valued benefit by employees is health, dental, and vision insurance amongst all generations, and candidates are making career decisions based on these offerings.
Health care options include but are not limited to:
Health Maintenance Organization (HMO)
Preferred Provider Organization (PPO)
Health Savings Account (HSA)
Flexible Spending Accounts
Paid Time Off /Sick Time/Vacation Time
Paid time off (PTO) can technically be used for anything, including personal days and holidays. Instead of separate vacation, sick, and personal leave plans, a PTO plan simplifies things by bundling everything together.
No federal or state law requires employers to provide PTO. It is up to the employer to offer PTO to employees, which is why there is a wide variety of policies. Although, if an employer chooses to offer paid time off, it must comply with state law, so a professional Florida employee benefits provider should be consulted.
For a younger demographic, tuition reimbursement programs and professional development opportunities are especially appealing. Tuition reimbursement has often shown to pay for itself by significantly reducing employee turnover.
Wellness benefits, such as yoga, standing desks, and meditation, can all lower health care costs, reduce absenteeism, and improve productivity and engagement.
Popular wellness programs include:
CPR/first aid training
Standing desk options
Stress reduction programs
On-site medical care
On-site fitness center
Food, drink, work culture, and environment changes.
About iSure Insurance Brokers
After serving leaders in the Greater Miami market for more than three decades, iSure Insurance Brokers has become the provider of choice for discerning commercial clients and individuals alike. Because no two insurance programs are or should be alike, you can be sure that iSure will craft a comprehensive approach to protection that is as unique as you are. We welcome the opportunity to protect what you have worked so hard to build. Please contact us at (855) 221-3406 to learn more about what we can offer you.
Posted in: Employee Benefits