Last month, we invited Jennifer Marecki, HR consultant and former benefits broker at CliftonLarsenAllen, to present individual components of employee benefits and how to put a benefits package together effectively. Jennifer helps companies with leadership and organizational development, outsourcing HR, and talent management. In case you missed it, here are some key takeaways:

-According to a 2018 employee benefits report by SHRM, using benefits strategically will increase retention, recruitment, and company performance

• 92% employees list benefits as important in their job satisfaction
• 32% of employees unlikely to leave their position cite benefits as a top reason to stay
• 29% of employees cite their benefits package as a reason they are looking for another job
• Using benefits strategically nearly doubles company performance, and nearly triples effectiveness of recruitment and retention 

-Key concerns from employees revolve around understanding what their benefits are and how to use them. Some testimonials from employees include

• “I often don’t understand what my options for benefits are, and which plans are better for me personally.”
• “Sometimes the benefits are not clearly defined or explained. I wish the pros/cons of the benefits were shared with me more clearly.”

-Jennifer Marecki outlines steps to design your benefits package.

1. Set your budget
2. Understand the needs of your employees. Know your 1-2 year hiring plan, and whether you need a versatile plan that meets the needs of junior and senior employees.
3. Select which benefits to provide
4. Compare benefits plans with brokers or PEO
5. Confirm that the worst-case scenario with maximum employer liability fits within your budget
6. Present benefits package to existing employees and prospective candidates

-There are multiple components to consider in your benefits package.

1. Medical insurance: Understand premiums, deductibles, and potential costs for you and your employees. Biotechs frequently cover 95%-100% of monthly health insurance premiums, but there may be good low premium plans in your state that you can supplement with an HRA or HSA. Consider copays and maximum out-of-pocket costs for employees. Be aware that only 10%-20% of people will hit their deductibles in a given year.
2. Ancillary benefits include dental, vision, life, and disability policies. They are generally low-cost items that make your company look more appealing.
3. Health Savings Account (HSA) enables your employees to use pre-tax dollars on medical costs.
4. Health Reimbursement Account (HRA) allows flexibility in how your employees can apply benefits to make your benefits package more versatile.
5. Individual Coverage Health Reimbursement Account (ICHRA) offers businesses the alternative to offer employees tax free money to pay for qualified health coverages. You design the Plan, employees get the coverage they need, then based on the design and eligibility the business reimburses them for their claims.
6. 401(k) can be very important depending on the seniority of employees you’re trying to attract. For many early-stage startups, 401(k)s are a nice-to-have component.
7. Attractive perks are easy wins that make your employees’ lives easier. 48% of employees weigh company perks like office snacks in their decision to join a company. Other examples are flex time, work anywhere policies, paid time off (PTO), transportation allowance, wellness programs, and gym memberships.

-Depending on your needs and budget, you may want to consider using a Professional Employer Organization (PEO) to provide payroll, insurance, HR guidance, and benefits administration. 

1. A PEO provides payroll processing with the PEO as the employer of record, also known as co-employment. This is not to be confused with Employee Leasing.
2. Separately, a Payroll Service Provider (PSP) provides payroll processing for the business and your company remains the employer of record. 

-Beware of common mistakes that young companies make:

1. Do not ask about medical history/conditions and who employees’ doctors are. It’s not your business, so you want to leave this to the health insurance broker.
2. Going for more expensive options in medical insurance policies or PEOs before it is needed. Make sure you budget out your options before making a decision.
3. Overlooking out of pocket costs for employees. Some plans have limits on % of deductible that the employer can cover.

We hope this has been helpful! If you have any questions for us or Jennifer Marecki, email us at [email protected]!

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