Other than health insurance, employee benefits are not a required coverage to offer. Some smaller agencies or businesses may decide to cut costs by only offering a few benefits, or not offering any. However, this is not the ideal solution. If a staffing agency can’t give their employees benefits, then it might increase dissatisfaction among your workers. In that case, there are affordable alternatives that can be offered instead of halting benefits. It’s imperative to be aware that stopping benefits can be disastrous, often in the case where benefits have been promised on paper. Many business get scared at the thought of having to offer coverage; but there’s nothing to fear. Having good benefits will benefit your business in the long run. This is what happens if you can’t afford to offer employee benefits, courtesy of PeopleKeep, and what you can do to reduce costs without reducing your benefits offerings.
Is Health Insurance Required?
As of 2015, employers with 50 or more full time equivalent (FTE) employees are required to provide health coverage to those employees or pay a tax penalty. This is called an employer mandate. So technically, if a business can’t afford the coverage, they will have to pay the tax penalty. If you have fewer employees than that and still provide coverage, then your staffing agency would be eligible for tax credits. On top of that, you won’t be penalized if you have under 50 employees. But even with the tax penalty, for those with over 50 employees, there are alternative health solutions available. This includes the Health Reimbursement Arrangement (HRA).
What About Other Benefits?
Health insurance is at this time the only employee benefit under any kind of legal mandate. Benefits such as vision insurance, dental insurance, disability insurance, tuition repayment, and others are all completely up to the agency’s discretion. However, as mentioned above, declining to offer benefits is instead likely to lower morale and make a company less attractive to potential employees. In addition, if benefits were promised during the hiring process or in any sort of legally binding contract, neglecting to offer what was promised could be considered an error or omission in employee benefits, leading to employee benefits liability insurance claims.
If your business is small or lacks the budget for high-cost benefits, rather than foregoing benefits altogether, consider offering some of these popular low-cost benefits:
- The opportunity to work from home
- Flexible work schedules
- Volunteer programs
- Pet-friendly workplaces
- Unlimited vacation time
Employee benefits are meant to be a positive thing for a business and its employees, and you shouldn’t let your program turn into a source of stress and liability. As you administer employee benefits, make sure to reinforce your program with Employee Benefits Liability Insurance, which will cover employers from claims of acts, errors and omissions in administering their benefits program.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (800) 245-9653 to speak with one of our representatives.