Benefits are a critical component in attracting and retaining employees, but finding the right mix for your business -- and dealing with the cost and administrative oversight that comes with a benefits program -- is incredibly time-consuming and can be very expensive. Compliance issues are another complicating factor that, without a full HR department at your disposal, eat into time you could have spent running your business.
A big part of my job here at YEC is to help find amazing business services for our members. We look for options with the best available pricing, including special YEC discounts, as well as excellent service and scalable solutions. More importantly, we do the legwork and a lot of analysis to make sure that we’re recommending only the best.
One of the areas where we have had the most impact in saving money, time and headache is in helping you provide top-notch benefits and services to your employees. Below are three key areas where we have been able to help members the most.
Health Insurance: Compete for the Best Talent With a Money-Saving Health Care Plan
In a 2012 survey by employment website Monster, when considering benefits packages, prospective employees said they placed the highest value on health care plans. Offering a health insurance plan also makes financial sense for you -- you can always deduct 100 percent of premiums for your employees.
Section 125 is an IRS Code that allows employers to offer plans where employees can deduct their insurance premiums pre-tax and set aside pre-tax funds to use towards qualified expenses, including transit and dependent care. Employees can save up to 30 percent in federal, state and local taxes on items they already spend money on. For business owners, it also allows for decreased company tax liabilities for payroll, Social Security, Medicare and unemployment. As a result, Section 125 can save employers almost $115 per participant in FICA payroll taxes.
While employees can purchase health insurance on the open market, it’s often expensive and difficult to secure. A group plan through you, their employer, means discounted insurance and a more attractive compensation package. Needless to say, it is also to your benefit to have healthy employees.
How YEC can help:
Choosing your carrier, plan designs and funding strategies are the most important decisions you’ll make -- and the most complex. Through YEC, you can access some of the best of best health insurance resources available to businesses, and we’ll be there to help you navigate the tricky waters of the Affordable Care Act.
401(k): Lower Your Company’s (And Your Employees’) Taxes
It’s not the sexiest benefit, but top talent is also looking for companies that offer a 401(k) as a benefit. A recent study by Charles Schwab showed that 87 percent of employees think of a 401(k) as a must-have, yet over 80 percent of small companies still don’t offer one.
By lowering your taxable income (and often lowering your tax bracket), the 401(k) is simply one of the best ways for business owners and employees to pay lower their taxes today. With a basic 401(k), you and your employees can save $18,000 a year pre-tax ($24,000 if you are over 50). But it gets better: If you were to add a profit-sharing plan, you could sock away up to $53,000 pre-tax (or $59k if you are over 50).
In addition to great personal tax advantages, a 401(k) also provides meaningful tax write-offs for your company. To start, all administrative costs incurred by the company in providing a 401(k) are a tax deduction. Any company contribution the company may choose to make through matching employee contributions or through a profit-sharing plan are also a write-off.
How YEC can help:
The great news is innovative 401(k)s are now readily available regardless of your company’s size. Our partner ForUs has reinvented the 401(k) so you don't have to hassle with an old-world product.
Professional Employer Organizations (PEO): A One-Stop Shop for Benefits
If HR admin isn’t your thing (and it isn’t for most business owners), but you want to offer all these benefits and more to your employees, you may be the perfect candidate for a PEO. The best PEOs provide a seamless experience for employees -- and save you time and administrative problems at the same time.
YEC uses one for our team, and the flexibility is an incredible asset for a fast-growing company. Instead of slowing down your leadership team, it’s the PEO’s role to ensure you are in compliance with all the laws, rules and regulations for having employees -- the details that can easily fall through the cracks and cost you time, money and stress. Not to mention gray hairs: I’ve seen companies fined up to $20,000 for not having the proper Workers Comp in place; in another case, one company ‘forgot’ to pay their payroll taxes, were fined and almost went under paying back taxes.
But PEOs aren’t just for avoiding issues; they’re an incredible way to give your entire staff access to a Fortune 500-level benefit package that includes all the bells and whistles, from health insurance plans to dental, vision, transit checks, flexible spending, dependent care, life insurance and disability and more, often for less money than you’d pay to offer such benefits separately. In some cases, the price of the health insurance through a PEO can be as little as half the price of open market plans. PEOs also offer cloud-based management tools, making benefits administration paperless.
Most importantly, employees love it too, because they can control everything from their deductions to direct deposit.
How YEC can help:
Different PEOs best serve different types of businesses based on your location, business type and employee population. At YEC, we have built a network of best-in-class PEOs that offer us discounted pricing we offer solutions for every business owner’s situation.
If you want to explore any of these options, Beth and her team are on hand to save you time and money. Just email your member concierge for the connection.