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April 18, What kinds of benefit plans are there? Employers may also sponsor optional and dependent life insurance, which provide additional coverage. Should the member become paralyzed, lose a limb, or lose his or her hearing, eyesight or speech in an accident, benefits will be paid to the plan member and his or her family. That can include prescription drugs, vision care, hospital care, medical services and equipment, paramedical services and assistance with out-of-province emergency travel.
Dental care coverage is exactly what you think it is. It covers preventive and diagnostic dental treatments. Employers typically sponsor a combination of short- and long-term disability coverage to assist their members.
There are a couple of other terms you should know: flexible benefits and health spending account : Flexible benefit plans have become quite popular with employers in recent years. Instead of designing one basic plan to cover all members, flexible or flex plans offer a list of benefit options that members can choose from.
Members are given credits that they allocate to options that are right for them and their family. If they choose benefits over and above their credit limit, they pay extra.
Health spending accounts are sometimes sponsored in addition to a flex plan. Again, members have credits that they can apply to health care expenses, some of which may not be covered by their employee or provincial plan. What happens if I leave my employer? Do I make contributions to participate in a plan?
What are the advantages of being a member of an employer-sponsored plan? Four things: Canadians who do not enjoy employer-sponsored benefit plan membership are at a significant disadvantage. Provincial plans provide limited levels of coverage.
So, how do flexible benefits work? Selecting the best employee benefits The first stage typically involves the company choosing which employee benefit schemes to include in their flexible benefits plan. You may have employee benefits unique to your company or brand that could be included.
Setting a flexible benefits allowance for employees Once the flexible benefits scheme has been set up the employer then sets a flexible benefits allowance for employees. Employees can then tailor their benefits Employees can then tailor their employee benefits to suit them using their flexible benefits allowance. Getting the most from flexible benefits Flexible benefits can give employers a really clear idea of which employee benefits employees value the most.
Flexible for you and for your employees Flexible benefits really are flexible for both employers and employees. Other articles you may like. How the Technology Scheme can support employees. The benefits of offering employee discounts to your employees.
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We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience. Tell these applicants no benefits are offered, and often top-flight candidates will head for the door. The positive side to this coin: Offer the right benefit, and your business may just jump-start its growth.
Many employers also either allow their employees to take time off without pay or let them use vacation days for religious holidays. Most full-time employees will expect one to two weeks paid vacation time per year. In explaining your vacation policy to employees, specify how far in advance requests for vacation time should be made, and whether in writing or verbally. There are no laws that require employers to provide funeral leave, but most do allow two to four days' leave for deaths of close family members.
The federal Family and Medical Leave Act FMLA requires employers to give workers up to 12 weeks off to attend to the birth or adoption of a baby, or the serious health condition of the employee or an immediate family member.
After 12 weeks of unpaid leave, you must reinstate the employee in the same job or an equivalent one. The 12 weeks of leave does not have to be taken all at once; in some cases, employees can take it a day at a time. In most states, only employers with 50 or more employees are subject to the Family and Medical Leave Act.
However, some states have family leave laws that place family leave requirements on businesses with as few as five employees. To find out your state's requirements, contact you state labor department. Complications quickly arise as soon as business begins offering benefits, however. That's because key benefits such as health insurance and retirement plans fall under government scrutiny, and "it is very easy to make mistakes in setting up a benefits plan," says Kathleen Meagher, an attorney specializing in benefits at Kirkpatrick Lockhart LLP.
And don't think nobody will notice. The IRS can discover in an audit what you are doing doesn't comply with regulations. So can the U. Department of Labor, which has been beefing up its audit activities of late. Either way, a goof can be very expensive. The biggest mistake? Leaving employees out of the plan. Examples range from exclusions of part-timers to failing to extend benefits to clerical and custodial staff. A rule of thumb is that if one employee gets a tax-advantaged benefit--meaning one paid for with pretax dollars--the same benefit must be extended to everyone.
There are loopholes that may allow you to exclude some workers, but don't even think about trying this without expert advice. Such complexities mean its good advice never to go this route alone. You can cut costs by doing preliminary research yourself, but before setting up any benefits plan, consult a lawyer or a benefits consultant. Providing benefits that meet employee needs and mesh with all the laws isn't cheap--benefits probably add 30 to 40 percent to base pay for most employees--and that makes it crucial to get the most from these dollars.
But this is exactly where many small businesses fall short because often their approach to benefits is riddled with costly errors that can get them in financial trouble with their insurers or even with their own employees. The most common mistakes:. If workers needs vary widely, consider the increasingly popular " cafeteria plans ," which give workers lengthy lists of possible benefits plus a fixed amount to spend.
Health insurance is one of the most desirable benefits you can offer employees. There are several basic options for setting up a plan:.
The rising costs of health insurance have forced some small businesses to cut back on the benefits they offer. Carriers that write policies for small businesses tend to charge very high premiums. Often, they demand extensive medical information about each employee. If anyone in the group has a pre-existing condition, the carrier may refuse to write a policy.
Or, if someone in the company becomes seriously ill, the carrier may cancel the policy the next time it comes up for renewal. Further complicating manners, some states are mandating certain health-care benefits so that if an employer offers a plan at all, it has to include certain types of coverage.
Employers who can't afford to comply often have to cut out insurance altogether. The good news: Many states are tying to ease the burden by passing laws that make it easier for small businesses to get health insurance and that prohibit insurance carriers from discriminating against small firms. MSAs, described above, are in part a response to the problems small businesses face. Until more laws are passed, what can a small business do? There are ways to cut costs without cutting into your employees' insurance plan.
A growing number of small businesses band together with other entrepreneurs to enjoy economies of scale and gain more clout with insurance carriers. Many trade associations offer health insurance plans for small-business owners and their employees at lower rates.
Your business may have only five employees, but united with the other, say, 9, association members and their 65, employees, you have substantial clout.
The carrier issues a policy to the whole association; your business's coverage cannot be terminated unless the carrier cancels the entire association.
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