Employee financial health benefits are becoming more and more critical in the lives of employees and their families and have a significant financial and administrative influence on a company. Since the COVID-19 pandemic, the majority of businesses operate in a world where a well-educated workforce demands a complete benefits package that takes into account more than “just” the basics. What does this mean for the employer?
A company’s capacity to attract and retain good employees can be severely hampered by the lack of a strong benefits program. Employers must be aware of these challenges and be prepared to make strategic decisions regarding employee perks, and take into account taxes, legal aspects, funding, and even establishing relationships with the right vendors or administrators.
Types of financial health benefits that employers offer
- Healthcare coverage: Healthcare insurance is at the top of the list of the most desirable benefits an employer can provide. In addition to that, many businesses provide a variety of choices to supplement coverage in the event of a catastrophic incident or disaster. Employees can increase their life insurance, critical illness insurance, disability insurance, and even pet insurance in some situations.
- 401(k) plans: A 401(k) used to be the most important benefit that flew under most employees’ radar. However, while more seasoned employees are very much aware that they need retirement plans, younger employees are starting to grasp the benefits of planning their post-employment life from the get-go. For most small businesses, the expense and management of a 401(k) plan is intimidating. Fortunately, assistance is available and it’s best to leave it to the professionals.
- Paid sick leave: For many, the decision to join a company is often influenced by the availability of paid time off. Especially after last year, paid sick time is one of the most valuable benefits an employer can offer. Employees are less likely to infect others and underperform when they have the option to remain home and recover when they are sick.
Add to this the ability for employees to use paid sick leave to care for a sick family member, and employers can create a high-value benefit that gives them a competitive edge. (There is no federal law that requires employers to pay family leave. However, there are currently a number of states that do require it. Get all the details on paid family & medical leave, state by state.
- Health savings accounts (HSA): This is a type of flexible spending account (FSA) that provides businesses with another way to help their staff meet their financial goals and obligations. With this FSA, workers can set aside a percentage of their pay for anticipated and unanticipated healthcare expenses through healthcare savings accounts. Copays, deductibles, uninsured charges (such as dental or vision if not covered), and even some over-the-counter prescriptions fall into this category.
- Medical Indemnity Plans: Medical indemnity plans, often known as indemnity health plans, are health insurance policies that allow you to choose from a variety of health-care providers and facilities. The health insurance company reimburses the actual amount spent on hospitalization bills under these plans. Following the submission of acceptable proof and medical bills, the amount paid is limited to the maximum sum insured under the policy.
There are three types of common medical indemnity plans: critical illness, cancer, and hospital confinement.
The last year has been a life-changing experience that will indeed have a long-term effect on financial health. Now more than ever, employers are planning to include individual coaching/credit counseling by financial professionals for their employees, offer them child/eldercare support, emergency savings funds, financial apps/websites, and even education savings programs. And all of this is in addition to their standard benefits packages because of a new holistic approach that understands that a solid benefits program has become essential to today’s successful business.