It is no surprise that talent shortage is causing employers to rethink how to attract prospective hires and and also retain exceptional talent. In a recent study, 80 percent of employees reported they would keep a job with a robust benefit plan rather work at a company that paid more with no benefits. The Society for Human Resource Management found that retention (72 percent) and recruiting (58 percent) were top reasons companies increased their employee benefit packages.
Each generation values benefits differently, but health care is one benefit that appeals to all generations.The 2018 EBRI/Greenwald & Associates Health and Workplace Benefits Survey found that 73 percent of workers listed health insurance as one of the top three most important benefits.
The cost is high if you want assurance that your company has a truly competitive plan, and you may need to prepare to pay a hefty amount of your budget towards employee health care. Fortunately, there are less costly options which will still keep current employees happy, and be attractive to prospective hires.
- Health Reimbursement Arrangement
With a health reimbursement arrangement (HRA), the employer provides an allowance toward employees’ individually purchased health insurance premiums. HRAs are often more affordable than traditional health care plans because employers can choose their own contribution amount as long as they stay within federal guidelines. This is especially attractive to smaller companies because it allows them to provide health care without having to worry about participation requirements or minimum contribution percentages.
- Individual Coverage Health Reimbursement Accounts
Individual coverage health reimbursement accounts (ICHRAs) are a new option for companies in 2020. These plans, which are governed by complicated regulations, reimburse employees for individual health insurance premiums as long as the employee satisfies certain conditions, including the following:
– Being enrolled in qualifying coverage.
– Having the option to opt-out annually.
– Not belonging to an employee group that has the option of traditional health care.
– Meeting age-related requirements (the maximum dollar amount provided to the oldest participant may not exceed three times the maximum available to the youngest participant).
There are many other options companies have regarding health care coverage including:
- The company’s contribution strategy for health care. For example, how much an individual employee need to contribute in order to receive coverage, and what percent will the company pay.
- The specific benefits that are important to your employees. This could include vision, dental, etc.
- Tax considerations.
- Whether the company is available for any subsidies or incentives.
Due to the numerous considerations, we strongly recommend interested companies seek expert guidance when evaluating a new or existing health insurance program.