Benefit planning is one of the most intricate priorities for a small business. Once you begin hiring employees and trying to recruit and retain talent, benefits become one of the most essential differentiators for your employees. In addition, legal and liability considerations kick in as you take responsibility for ensuring that your employees’ needs are accurately and adequately met. As a result, planning and executing benefits effectively is truly critical for your small business today…and tomorrow.
We asked Mike Kelly, Jr., of Kelly Benefits in Annapolis, Maryland, to help us explore this topic and examine some of the key considerations for small business owners as they plan their benefit strategies today.
Q. What are the key ingredients in an effective small business benefit plan?
Most employee benefit plans start one of two ways. They either have a retirement plan need or a health insurance need. We normally start by crafting a medical, dental and vision plan. Those three usually go together.
From there an employer normally looks at adding either a 401(k) Plan or a SIMPLE IRA. After those two are up and running we start to look at a variety of ancillary benefits. Typically, they start with a Short Term and Long-Term Disability program, as well as group life insurance.
What’s great with ancillary benefits is that they don’t end there. We can place a variety of voluntary products, such as voluntary life insurance, accident plans, critical illness, pet insurance, and even credit monitoring services.
2. How can a small business cost-effectively build a competitive benefits plan in this hyper-competitive environment for talent?
Small businesses need to be focused on what is the most important thing to them and their vision. Don’t try and build out a full robust employee benefits program overnight. All employee benefits are made to be flexible and there are ways to get creative. At the end of the day it’s a great way to save on some taxes and reward employees that help your business grow that you want to retain.
3. What are the items small business owners most often miss, skip, forget about or ignore that could make a huge impact on the value of their benefits plan for employees?
I think most employers don’t realize the impact voluntary benefits can have on a full benefits program. It’s really nice to pay for the major benefits, but by offering your employees more flexibility on what they can choose helps. It doesn’t matter what size business you are. You can start with a voluntary benefits provider like Colonial Life or Aflac who can help provide voluntary benefits for all sizes of companies.
4. What are some emerging trends in benefit planning and/or new benefit options that small business owners should consider?
Telemedicine and wellness programs have started to take off. With it being the digital age, most employees want services at any time of the day. It’s great that the majority of carriers out there have a way to facetime with a doctor. They can write prescriptions and help you no matter where you are in the country. It seems that every day the vendors are finding new ways to increase services and bring more customization to the end user.
5. With rising costs on every front, how can small business owners hold the line on costs while still delivering solid benefits to their employees?
It starts by having a discussion with the advisors in your life. Figure out what you want to accomplish and there are ways to build it. In the under 50 life groups, there are ways to offer three plans to help keep corporation costs down while still allowing your employees flexibility. You need to ask your benefit provider what other people in similar industries are offering.
They should be able to tell you without naming actual companies what the industry standards are. That way you can make sure you are keeping your costs in line for whatever services you may provide, while having benefits programs in the place that will help retain your best employees. Retaining good employees and saving some taxes is a lot easier when an employer offers a robust benefits package.
Mike Kelly is Vice President of Kelly Benefits, which alongside its sister companies Kelly Financial Advisors and Kelly Risk Management, provides a complete range of benefits, insurance, bonding and wealth management solutions for small and growing businesses throughout the Anne Arundel and Prince George’s county regions of Maryland. He may be reached at (410) 349-3806 or via email to firstname.lastname@example.org.