As your small business grows, you may find that you want, or need, to offer insurance coverage, such as medical, dental or vision, to your employees. Offering these benefits can help attract and retain top talent, but it’s also a big investment that should not be taken lightly.
To find out more about what businesses need to know before taking the plunge, we asked members of Young Entrepreneur Council (YEC) the following:
Q. What should startups or newer small businesses keep in mind when planning to offer employee insurance?
1. Set a budget
It can be expensive to provide healthcare for employees, so set aside a budget to pay for insurance so it doesn’t hit you negatively down the road. You can budget it as a percentage of your payroll or as a monthly cost, based on each employee. —Jared Atchison, WPForms
2. Look at the full range of potential benefits
You can offer more than just health insurance when creating your employee insurance plan, which will be beneficial to your team and can lower your payroll tax liability. You can add dental and vision insurance, retirement plans like a 401(k), paid parental leave and more. It might be tough to choose what to offer, so if you’re having trouble, study what your competitors are doing. —Thomas Griffin, OptinMonster
3. Set an enrollment schedule
Business owners often use open enrollment to allow employees to opt in. You should think carefully about when you want open enrollment to occur when planning employee insurance. Every company has different stipulations, depending on their insurance company and business size. —Blair Williams, MemberPress
4. Check out online resources
Just like there are online platforms that help you compare flight prices and auto insurance, there are platforms that can do the same for employee health insurance. These platforms will help you compare plans side-by-side so you can easily determine which plan is the best for your small business. Be sure to take advantage of online resources. —Stephanie Wells, Formidable Forms
5. Identify employees’ healthcare needs
Employees feel like they have more job security when they receive workplace insurance, especially if they have dependents in their family. Give them that security with specific policies and they are more likely to stay. You need to decide what benefits, such as annual physicals or eye exams, will have the most value. Then you can choose a plan that’s within budget and that can maintain your employees’ good health. —Duran Inci, Optimum7
6. Assess your expenses over time as you scale
You need to calculate how insurance costs may grow over time, even with a volume discount, to make sure you can always provide the same quality level of benefits. It can be a struggle, but it’s important to assess this expense. —Peter Daisyme, Hostt
7. Ask employees what they want and need
If you aren’t sure what types of insurance to offer your employees, ask them. You can send them an anonymous survey so they can answer questions regarding perks that are most important to have and why. This gives you better insight into what they need from you so you can provide accordingly. —Chris Christoff, MonsterInsights
Other Articles From AllBusiness.com:
8. Make sure employees understand what they’re getting
It’s really important to make sure your employees fully understand the benefits they are getting. Many times, agents that sign up employees don’t provide enough information or are not able to field the questions in a way that everyone can properly understand. Make sure that the account agent you get is one that can easily talk with your staff. —Nicole Munoz, Nicole Munoz Consulting, Inc.
9. Bundle your benefits
Startups and small businesses that plan on implementing insurance should consider bundling options for employees. Beyond insurance, 401(k) and retirement plans are important to many employees. Look for ways you can bundle all these features into one package. The result is happier employees who stay loyal to your company. —Syed Balkhi, WPBeginner
10. Consider hiring a professional employer organization
Don’t reinvent the wheel. Without substantial venture backing, most growing small businesses do not realistically have the resources to offer world-class responsive HR departments completely in-house. Yes, great company culture usually comes with perks like insurance, but this landscape has been traversed by professionals who can advise you. Try before you buy with a solid PEO. —Reuben Yonatan, GetVoIP
11. Think of the bigger picture
When planning small business health insurance, startups/newer small businesses should keep in mind that insurance can have a positive impact on the overall bottom line, based on tax advantages and employee access to effective medical providers. It’s tempting for small businesses not to offer health insurance, but when you do, it improves your overall image and will entice talented people to want to join you. —Jared Weitz, United Capital Source Inc.
12. Take advantage of subsidies and incentives
Startups aren’t exactly well-known for providing the best insurance deals in the market. But benefits like these represent a unique value proposition for most people, driving their loyalty and attracting other talent. To provide employees the best of what you can afford, consider applying for subsidies and public incentives that are specially made to support startups and small businesses. —Abeer Raza, TekRevol
RELATED: Don’t Allow Your Small Business to Be at Risk—A Guide to Choosing Insurance