Employee benefits have come a long way in the U.S. since the 1940s. In fact, after World War II, President Roosevelt began the “Stabilization Act” which helped employers provide essential benefits to their employees. However, those benefits were modest, starting with health insurance, then moving into dental and vision benefits by the 1950s. Before Roosevelt’s act, the government made pensions tax-exempt and adopted its own pension plan for federal workers. Social Security was also adopted in 1935.
Fortunately, employee benefits options have become much more innovative since then. Modern benefits far exceed those of our grandparents and great-grandparents. The array of opportunities that employers offer in the current workplace range from maternity/paternity leave to tuition assistance. A far cry from the yester-years.
Why Offer Benefits to Employees?
There are many reasons employers today choose to offer a competitive benefits package.
One reason to offer benefits to employees is that it saves you money in taxes. The cost of employee benefits is tax deductible just like wages, salaries, bonuses and commissions. Additionally, if you choose to offer a Section 125 Plan, you’ll be able to reduce FICA expenses on eligible benefits selected by employees under the plan.
Another reason to offer employees benefits is to show them you care for them and their family members. A good mix of medical and supplemental benefits will help them protect their income in the event of an accident or illness. Show employees that you are more than just an employer who wants to profit from their talent. By providing them with quality benefits you prove that you care for them as individuals.
Lastly, of course, providing excellent benefits is that you want to attract and retain great employees! It’s just that simple. Today, employers want to encourage better job performance while also reducing employee turnover rates. Happy employees create a positive work environment, which has been shown to increase productivity and job satisfaction. It’s a win for all.
When to Offer Benefits & What Types
As a general rule, you will want to provide benefits that are relevant to your industry, work environment, and the type of staff you need. A few options to consider include the following:
- Section 125 Plan: This is an IRS-approved program to help employees increase their spendable income. It also saves you money in FICA expenses.
- Reimbursement Accounts: These types of accounts provide employees with a way to reserve a portion of their income, on a pre-tax basis, to pay for out-of-pocket medical and dependent care expenses.
- Medical, Dental and Vision Plans: A good health plan provides benefits to help employees afford to pay for medical, dental and vision care for themselves and their family members.
- Supplemental Insurance Plans: From disability income insurance, accident only insurance and cancer insurance to life insurance, retirement plans, and identity protection, you can customize your benefits portfolio to include options that employees may be looking for.
What Do Your Current Employee Benefits Look Like?
Benefits help employers and employees maintain sustainability when they are planned just right. If you need assistance with ensuring that you’re offering the right kinds of employee benefits, connect with First Financial Group of America (FFGA). We will review your current offerings to make sure you are maximizing the full potential of your benefits plan. Contact us today to claim your free benefits review!
