As a small business owner considering group health insurance, one question on your mind might be whether you should offer additional employee benefits besides health insurance. You may also be wondering how many small businesses provide employee benefits beyond health insurance, as well as what kind of benefits are most commonly offered by employers.

What are small business employee benefits?

Small business employee benefits are various perks that an employee has in addition to their regular salary. This can consist of health, vision, dental, and retirement plans. Offering small business employee benefits can enable you to obtain and maintain high-quality, hardworking employees.

Types of employee benefits for a small business

There are two types of employee benefits for a small business: financial benefits and ancillary benefits. 

Financial benefits

Financial benefits are always a  major incentive for employees. Some examples of financial benefits that you can offer your employees are employee stock options, pay raises, or any other benefits that result in employees’ finances becoming bolstered in some way. 

Ancillary benefits

Another type of employee benefits for a small business is ancillary benefits. Ancillary benefits, or fringe benefits, are benefits that may appear to lessen an employee’s salary, but they’re actually intended to lower their overall healthcare costs in the long-run. Some examples of ancillary benefits are: life insurance, dental insurance, prescription drug coverage, and eye insurance. 

Additional insurance options

According to a eHealth survey of small business owners, most small businesses that offer group health coverage to their employees also provide additional benefits, such as dental and vision plans, 401(k) plans, life insurance, and paid family leave.

Source: eHealth 2018 Small Business Health Insurance Report

Some useful insights from the report include:

• Dental and vision are the most popular employee benefits – Over half of small businesses offer dental plans, with vision plans being the second most common employee benefit.
• Retirement-related benefits are an important consideration – Almost a quarter of small businesses offered a 401(k) plan to their employees.
• Fewer businesses decide to offer non-medical benefits – Life insurance and paid family leave were less commonly offered as employee benefits.

When evaluating employee benefits as well as group health insurance, you should always consider budget and coverage preferences for yourself as the business owner as well as your employees. You could consider discussing options with your staff to find out how much they would want to spend for improved access to dentists and optometrists or a retirement plan.

What employee benefits are required for small businesses?

There are various employee benefits that small businesses are required to offer their employees. Some of these employee benefits include:

Health insurance

Under the ACA, small businesses are required to offer health insurance to employees who work a minimum of 30 hours a week or are considered full time. 

Workers’ compensation

Workers’ compensation is also a benefit that small businesses must offer their employees. It is not usually federally mandatory to offer worker’s compensation insurance, but many states mandate it, so be sure that you determine whether you must offer it or not. If it’s not mandatory in your state, then you might want to offer another useful benefit to your employees instead of paying for workers’ compensation. 

Disability insurance

Offering disability insurance is typically not mandatory, but some states require small businesses to offer short-term disability insurance. However, regardless of if your state requires it or not, offering disability insurance to your employees is a good idea. A small business owner never knows when an employee might file a disability claim, so in order to protect your business and assets, it’s in your best interest to offer this benefit. 

What benefits should a small business offer its employees?

If you’re the owner of a business and are contemplating offering a small business benefits package, then you may be wondering what benefits to include. Here are some common employee benefits that a small business should offer its employees:

• Health insurance
• Paid time off (PTO) such as sick days and vacation days
• Flexible and remote working options
• Life insurance
• Short-term and/or long-term disability insurance plans
• Retirement benefits or accounts
• Financial planning resources
• Professional development incentives and perks
• Fitness or healthy lifestyle incentives
• Employee assistance programs for mental health and substance use issues that interfere with work
• Identity theft protection
• Childcare benefits
• Student loan repayment benefits/ tuition reimbursement programs
• Home office improvement incentives for remote workers
• Sign-on bonuses

The value of dental and vision plans as employee benefits

Even though dental and vision insurance plans are not required for small businesses, these employee benefits are still frequently offered by employers. Many vision and dental plans come in the form of add-ons (also referred to as ancillary benefits) to group health insurance plans. If your small business decides to include dental and vision insurance, you can create a compelling benefits package that more fully covers both you and your employees.

If you’re confused about your options for adding dental insurance to your small business employee benefits, you can read up on the types of small group dental plans to offer.

Are dental and vision plans affordable as employee benefits?

Another reason why dental and vision insurance plans remain popular may be their low cost. Small business health insurance plans can often cost hundreds of dollars per person in premiums every month, but dental and vision plans starting at as little as $12 a month per individual on eHealth.

Regardless of the cost of small business dental and vision plans, your company can limit your actual costs in several ways:

• Your small business can usually deduct the cost of healthcare-related expenses for employees from your federal business taxes.
• As a small business owner, you can ask your employees to pay a share of their monthly premiums.
• These employee benefits may contribute to improving overall motivation and morale.

While offering additional benefits means contributing a greater amount to each worker’s monthly vision and dental premium, your small business may be able to better attract and keep quality employees through offering more comprehensive coverage.

The importance of employee benefits in a small business

Although group health insurance is one of the most highly valued employee benefits, offering other benefits could help your small business stand out as an employer of choice. In fact, 80% of workers would choose a job with more benefits over a 30% raise without benefits.

A small business benefits package that includes multiple employee benefits may be a worthwhile investment for recruiting and retaining potential hires interested in joining your company.

Find affordable health insurance for your small business employees

Offering employee benefits for your small business can enable you to increase employee retention and loyalty. It can be difficult to find and keep dependable employees, but if you provide them with competitive employee benefits, they’ll be more likely to stay with your business.

eHealth can help you select small business health insurance plans, as well as dental and vision plans, for your employees. Visit eHealth.com or speak with one of our licensed health insurance agents to discover if offering employee health benefits is the right choice for your business. You can also check out our small business health insurance resources for more help.

This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.