Employee benefits are not the same as employee insurance or workers’ compensation insurance. Let’s look at the differences between the two.
While employee benefits differ from employee insurance, or workers compensation, many times your commercial insurance agent provides both insurance and employee benefits to your business.
Employee benefits generally start with health insurance and group term life insurance. With the ongoing changes of the Affordable Care Act — frequently called “Obamacare” — make sure you work with your agent to understand your responsibility.
As part of the health insurance package, an employer may opt to provide vision and dental insurance. In addition to life insurance, an employer may also offer group disability insurance.
A retirement plan is generally offered as an employee benefit as well. Unlike workers compensation insurance which is required by most states, employee benefit packages are provided at the discretion of the employer and may be funded with a variety of options.
Generally, employers can provide these additional benefits to just the employee or also opt to cover family of the employees as well. Cost is almost always the determining factor in putting together an employee benefits package. With the cost of health insurance, it is reasonable to ask the employee to pay a percentage of the coverage, and perhaps even all of the family coverage.
Workers compensation insurance is business insurance which will provide wage replacement and medical coverage for an employee injured on the job. Once you hire an employee a prudent business owner will consider worker’s compensation insurance. Varying by state, this coverage is mandatory depending on different variables. Ask your commercial agent the requirements in your state.
As your business grows, an employee benefits package may be necessary to attract and retain good employees. Work with your commercial broker to develop and implement an employee benefits package that makes sense for your business.