Insurance for employers, what you need to know in designing your plan.
Owning a business and hiring employees can be extremely rewarding. It also can be extremely time consuming and sometimes even financially challenging. Having people depend on you and the business to make a living comes with a great deal of responsibility.
Let’s first look at required insurance that needs to be provided for employees. Almost every state requires that you have workers compensation insurance in place when you hire employees. The actual requirement varies state to state, but it is recommended to put it in place with even one employee.
Workers compensation in the simplest definition protects the employee in the event of a work related injury or illness. Medical costs, rehabilitation costs, and income replacement as well as a death benefit are provided. In return, the business is protected from a lawsuit from such an injury or illness.
It is best to talk with your state department of insurance and a licensed insurance professional to determine specific coverage and requirements for you business. Several states also require some form of disability insurance for employees. Again, discuss this with your insurance professional.
Employee benefits include types of insurance which include health insurance, dental, disability, life, and possibly others. While not required, employee benefits help attract and retain good employees to help grow the business. Business owners also benefit as they are part of the benefit plan and there are also tax advantages to offering employee benefits.
Most small business will design a very basic employee benefit package to start. This package will usually include medical insurance and perhaps dental insurance. A shared cost with the employee is quite common. Supplemental insurances may be offered as part of the package and may be 100% employee funded.
As you grow your business and the number of employees, you can redesign your benefits package. With a higher number of employees come generally greater options and programs. Work on plan design from the onset with your licensed insurance professional.