As a business owner, you have responsibilities to your employees. Of course, you want to respect all employee rights; but on top of that, you likely want to do right by your employees to keep them satisfied with their jobs and loyal to your company. Aside from keeping workers happy, you want to keep them healthy. The first step to fulfilling these goals is understanding required and optional employee benefits, especially those dealing directly with employee health.
Required vs. Optional Employee Benefits
Some employee benefits and labor laws are set at the federal level, while others vary from state to state. To better understand your responsibilities to your employees, spend some time researching federal labor laws, especially the Fair Labor Standards Act, and your state-specific laws, which you can find here. In general, the employee benefits, required and optional, fit into the following categories:
- Disability Insurance– Some states and territories (California, Hawaii, Rhode Island, New Jersey, New York, and Puerto Rico) require businesses to cover employees with disability insurance. If an employee loses their ability to work due to a non-work-related injury or illness, this insurance pays them a portion of their salary.
- Health Insurance– Under the Affordable Care Act, businesses with 50 full-time employees or more must offer employees health insurance or face a tax penalty of $3,860 per employee.
- Medical and Family Leave– The Family and Medical Leave Act requires employers to provide family and medical leave. Under the law, this leave doesn’t have to be paid, although many employers elect to pay a portion of the employee on leave’s salary.
- Holidays and Paid Time Off– There is no law in the U.S. requiring employers to give paid time off or holidays. Nonetheless, paid time off is a common benefit in the U.S.
- Workers’ Compensation Insurance Covered– All states except Texas mandate this coverage for the majority of businesses, though specific details of workers compensation state laws vary. This insurance policy covers work-related illnesses and injuries, and benefits include paid medical expenses and lost wages.
- Retirement Plans– The U.S. does not require businesses to provide retirement plans to their employees. However, this is another common benefit in the U.S., and many companies offer 401(k) matching.
Differentiating Workers’ Compensation and Health Insurance Coverage and Benefits
As explained in the list above, many employers are legally required to cover workers with health-related benefits. For logistical and legal purposes, work-related injuries and illnesses and non-work-related injuries and illnesses are covered by completely independent plans. One of the primary differences between employee health insurance and workers’ compensation insurance is that employers pay only a portion of employee health insurance but pay the entirety of workers’ comp coverage. There is also for-profit vs nonprofit insurance to consider.
As previously mentioned, if you have 50 or more employees, you’ll need to provide employer-sponsored health insurance. These plans typically cover your employees and their dependents and include basic coverage, including medical, surgical, prescription drugs, dental, and eye insurance coverage.
The plans must be affordable, and in most states, you’ll be responsible for paying at least half of the employees’ premiums. What you pay for your employees’ premium is tax-exempt.
In addition, you’ll need a workers’ compensation insurance plan to account for work-related injuries and occupational illnesses. This policy covers any injury an employee sustains while performing their work duties regardless of fault and where the incident occurs. It also covers diseases that an employee develops because of their work’s physical demands or work environment.
If the insurance provider approves an employee’s workers’ compensation claim, the insurer offers a compensation package that can include emergency medical expenses, ongoing care, medications, and missed wage replacement. In the case of a workplace fatality, workers’ compensation often covers death benefits.
Going the Extra Mile with Employee Wellness Programs
Aside from offering insurance that pays for medical treatments, many employers now have preventative employee wellness programs that promote overall health and fitness. A few common offerings include:
- Stress reduction programs
- Weight loss and management programs
- Health risk screenings and assessments
- Exercise programs, classes, or gym memberships
- Nutritional classes
While these programs are optional, many companies, especially newer ones, offer these programs because they can increase employee morale and satisfaction, raise productivity, and decrease health insurance and workers’ comp costs by promoting health and safety.
Healthy Employees = A Healthy Business
It’s the responsibility of any business owner to provide legally required health insurance and benefits. However, many companies provide additional health perks because of the array of benefits they provide both you and your employees.
If you’re a new business, it may be tempting to go without the non-mandatory benefits and policies. However, these policies can often help keep your employees healthier, meaning your premiums may drop as a result. Additionally, having more perks will help you prevent high employee turnover and result in more employees staying longer with your company.