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Unlocking the Best Benefit Plans for Your Small Business

Why Employee Benefits Matter for Small Businesses

When it comes to running a small business, benefit packages for small business are crucial. Not only do they help attract and retain top talent, but they also provide a competitive advantage that can set your business apart. Here’s a quick breakdown of why benefits are essential:

  • Attract Top Talent: Potential employees often prioritize benefits packages when choosing where to work. Offering robust options makes your company more attractive.
  • Retain Valuable Employees: Keeping top talent is easier if employees feel cared for and valued.
  • Gain a Competitive Edge: A thoughtful benefits package differentiates your business from competitors and enhances your company’s reputation.

Offering comprehensive benefits is not just a nice-to-have; it’s a strategic move that can boost your business growth and employee satisfaction.

I’m Dalton Tigner, with expertise in benefit packages for small business. Throughout my career, I’ve helped numerous small businesses design and implement effective benefits strategies that meet their unique needs. Let’s delve deeper into how you can unlock the best benefit plans for your small business.

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What Are Employee Benefits?

Employee benefits are perks or compensation given to employees beyond their regular wages or salaries. Think of them as a special bonus that makes a job more attractive and rewarding.

Types of Benefits

Benefits come in many forms, and they can be categorized into several types:

1. Core Benefits:
Health Insurance: Covers medical expenses and sometimes dental and vision care.
Retirement Plans: Helps employees save for their future.
Paid Time Off (PTO): Includes vacation days, sick leave, and holidays.
Disability Insurance: Provides income if an employee can’t work due to illness or injury.

2. Fringe Benefits:
Company Cars
Gym Memberships
Childcare Assistance
Employee Discounts

3. Financial Wellness Benefits:
Pay Raises: Regular increases in salary or hourly wages.
Employee Stock Options (ESOs): Allows employees to buy company shares at a discount.
Loan Repayment Plans: Helps with student loans or other debts.
Financial Wellness Programs: Offers counseling and education to manage finances better.

4. Unique and Creative Benefits:
Pet Insurance
Yoga Classes
Free Books
Onsite Health Care

Intangible Business Asset

Employee benefits are more than just perks—they are an intangible business asset. Much like a company’s reputation or industry expertise, benefits can define an entire corporate culture. They impact how employees perceive their employer and can drive overall business success.

For example, companies offering comprehensive health insurance and flexible work schedules often see higher employee satisfaction and retention rates. According to a study by Forbes, employees need more than a salary to feel valued and motivated. A well-designed benefits package can be a powerful recruitment and retention tool.

HR Challenge

While benefits are valuable, they can also be a significant HR and administrative challenge. Small businesses may find it especially daunting to navigate the complexities of setting up and managing benefits. However, with the right strategy, these challenges can be turned into opportunities.

For instance, integrating benefits administration with payroll processing through solutions like Paychex Flex® can minimize the administrative burden. This allows business owners to focus on running their business while ensuring employees enjoy their benefits to the fullest.

By understanding the different types of benefits and recognizing their value, small businesses can create a competitive advantage in attracting and retaining top talent. Next, let’s explore the essential benefits required by law.

Essential Benefits Required by Law

When it comes to benefit packages for small business, understanding the essential benefits required by law is crucial. These benefits ensure compliance with regulations and provide a foundation for a competitive benefits package. Below, we delve into the key benefits that small businesses are legally mandated to provide.

Workers’ Compensation

Workers’ compensation is a type of insurance that protects both employers and employees in the event of work-related accidents or illnesses. This insurance covers medical treatment, lost wages, rehabilitation care, disability costs, and even funeral benefits if necessary.

  • Mandatory in all states except Texas
  • Rates depend on the type of work performed
  • Essential for avoiding litigation over workplace injuries

For example, a construction company will have higher workers’ comp rates compared to an accounting firm due to the higher risk associated with construction work.

Unemployment Insurance

Unemployment insurance provides financial support to employees who lose their jobs through no fault of their own, such as during layoffs. This benefit is funded by employers and is regulated at both federal and state levels.

  • Required in all states
  • Funded by employer taxes
  • Amounts and rates vary by state regulations

When an employee files an unemployment claim, the employer’s account is charged based on state-specific guidelines. It’s essential for businesses to stay registered with their state’s workforce agency to manage these claims properly.

Disability Insurance

Disability insurance is mandatory in certain states, including California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island. This insurance provides income to employees who are unable to work due to non-work-related injuries or illnesses.

  • Short-term disability: Covers 2-6 months, up to 70% of income
  • Long-term disability: Covers 50-70% of monthly income, can last years

This coverage ensures employees have financial support during significant health challenges, helping them focus on recovery without the added stress of income loss.

Health Insurance

Health insurance is a cornerstone of employee benefits. Under the Affordable Care Act (ACA), businesses with 50 or more full-time employees are required to offer health insurance.

  • Group health insurance: Often more affordable and comprehensive
  • High deductible plans: Lower premiums but higher out-of-pocket costs
  • SHOP (Small Business Health Options Program): Offers flexible, affordable plans for businesses with 1-50 employees

Providing health insurance not only meets legal requirements but also significantly enhances employee satisfaction and retention.

Family and Medical Leave Act (FMLA)

The Family and Medical Leave Act (FMLA) mandates that businesses with 50 or more employees must provide up to 12 weeks of unpaid, job-protected leave for certain family and medical reasons.

  • Qualifying events: Birth of a child, adoption, caring for a family member with a serious health condition, personal serious health condition
  • Eligibility: Employees must have worked for the employer for at least 12 months and 1,250 hours in the past year

FMLA ensures employees can attend to critical life events without fear of losing their jobs, fostering a supportive work environment.


The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires businesses with 20 or more employees to offer continued health insurance coverage to former employees and their families for a limited time after employment ends.

  • Coverage duration: 18 to 36 months, depending on the qualifying event
  • Cost: Former employees must pay the entire premium, including the portion previously covered by the employer

COBRA provides a safety net for employees during transitional periods, ensuring they don’t lose health coverage immediately after leaving a job.

Understanding and complying with these essential benefits not only keeps your business legally compliant but also builds a foundation of trust and security with your employees.

Comprehensive Benefit Packages for Small Business

Creating comprehensive benefit packages for small business is essential to attract and retain top talent. Let’s dive into the key components: health insurance, dental and vision insurance, paid time off, retirement plans, flexible spending accounts, and health savings accounts.

Health Insurance Options

Group Health Insurance: This is the cornerstone of any benefits package. Offering group health plans shows employees you care about their well-being. These plans provide essential medical coverage and can be more affordable than individual plans.

High Deductible Plans (HDHPs): These plans come with lower premiums but higher deductibles. Employees pay more out-of-pocket before the insurance kicks in. Pairing HDHPs with Health Savings Accounts (HSAs) can help manage these costs.

SHOP Marketplace: Small businesses can purchase affordable group health plans through the Small Business Health Options Program (SHOP). This marketplace offers various plans that fit different budgets while still providing substantial benefits.

ACA Compliance: For businesses with 50 or more full-time employees, offering health insurance that meets the Affordable Care Act (ACA) standards is crucial. It ensures your business remains compliant and avoids penalties.

Retirement Plan Options

401(k) Plans: These are popular retirement savings options. Employees can contribute pre-tax income, and employers often match contributions up to a certain percentage. This incentivizes employees to save for their future.

SEP-IRA: Simplified Employee Pension IRAs are excellent for small businesses due to lower administrative costs. Employers can make contributions to their employees’ retirement accounts, which are tax-deductible.

SIMPLE IRA: Savings Incentive Match Plan for Employees (SIMPLE IRA) is designed for small businesses with 100 or fewer employees. It allows both employer and employee contributions, making it a flexible and straightforward retirement plan.

Paid Time Off and Leave Policies

Vacation Days: Offering paid vacation days is a great way to ensure employees take time to recharge. This not only boosts morale but also increases productivity.

Sick Leave: Paid sick leave ensures employees can take care of their health without the stress of losing income. It also helps prevent the spread of illness in the workplace.

Parental Leave: Providing paid parental leave for new parents shows your commitment to work-life balance. It’s a significant benefit that can help attract and retain employees, especially those starting families.

Mental Health Days: Recognizing the importance of mental health, some companies offer specific days off for mental well-being. This can reduce burnout and improve overall employee satisfaction.

Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)

Flexible Spending Accounts (FSAs): FSAs allow employees to set aside pre-tax dollars for eligible medical expenses. This reduces taxable income and helps cover out-of-pocket healthcare costs.

Health Savings Accounts (HSAs): Available to those with HDHPs, HSAs let employees save pre-tax money for medical expenses. Unlike FSAs, unused funds roll over year to year, and employees can take their HSA with them if they leave the company.

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By offering a mix of these benefits, small businesses can create a competitive and attractive package that meets the diverse needs of their employees.

Next, let’s explore unique and creative benefits to help your business stand out.

Unique and Creative Benefits to Stand Out

In the competitive world of small businesses, offering unique and creative benefits can help you attract and retain top talent. Here are some standout options to consider:

Backup Care

Backup care provides employees with reliable alternatives when their regular child or elder care arrangements fall through. This benefit can significantly reduce absenteeism and boost productivity. Employees can have peace of mind knowing they have 24/7 access to live representatives who can help them secure suitable care quickly.

Employee Assistance Programs (EAPs)

Employee Assistance Programs (EAPs) support employees and their families with personal issues like mental health, substance abuse, and work-life balance. Confidentiality is key to encouraging participation. Communicating the benefits and ensuring employees know their privacy is protected can lead to higher engagement.

Pet Insurance

For pet lovers, pet insurance can be a game-changer. This benefit helps manage the costs of veterinary care, from vaccinations to surgeries. By offering pet insurance, you show employees you care about their whole family, including their furry friends.

Yoga Classes

Yoga classes at the office or through local studios can promote physical health and reduce stress. This perk can lead to a more relaxed and productive workforce.

Free Books

Offering free books is a simple but effective way to encourage continuous learning and development. Whether it’s through a book club or a monthly book allowance, this benefit can foster a culture of growth and curiosity.

Pet-Friendly Environments

Allowing pets at work can create a more relaxed and enjoyable atmosphere. Pet-friendly environments can reduce stress and improve morale, making the office a more pleasant place to be.

Onsite Health Care

Providing onsite health care services, such as flu shots or regular health screenings, can make it easier for employees to stay healthy. This convenience can lead to fewer sick days and a more productive team.

Wedding Reimbursement

A unique and heartfelt benefit is wedding reimbursement. Helping employees with wedding expenses shows you care about their personal milestones. This benefit can foster loyalty and a deeper connection to the company.

By integrating these unique and creative benefits into your benefit packages for small business, you can create a more attractive and supportive workplace. These perks show that you value your employees’ well-being and personal growth, setting your small business apart in a competitive market.

Next, let’s delve into financial wellness benefits that can further enhance your offerings.

Financial Wellness Benefits

Financial wellness benefits can be a game-changer for your small business. These benefits help employees manage their finances better, reducing stress and boosting productivity. Let’s explore some key financial wellness benefits you can offer.

Pay Raises

Regular pay raises are essential. They help employees keep up with the cost of living and feel rewarded for their hard work. A study by Capital One found that 68% of people worry about not having enough money for retirement. Regular pay raises can ease this anxiety, making employees feel more secure about their financial future.

Employee Stock Options

Offering employee stock options (ESOs) is a fantastic way to align your employees’ interests with your business goals. When employees own a piece of the company, they’re more likely to be invested in its success. This benefit can also help employees build wealth over time.

Financial Wellness Programs

Financial wellness programs provide employees with the tools they need to manage their money better. This can include classes or workshops on budgeting, saving, and investing. PwC has shown that offering financial literacy programs can significantly improve employees’ financial well-being.

Loan Repayment Plans

Many employees are burdened by student debt. Offering loan repayment plans can be incredibly attractive. This benefit shows that you understand their challenges and are willing to support them. It can make your business stand out to young professionals starting their careers.

Tuition Reimbursement

Tuition reimbursement programs encourage continuous learning and skill development. Helping employees further their education benefits them personally and enhances your company’s overall skill set. This can drive innovation and growth within your business.

By integrating these financial wellness benefits into your benefit packages for small business, you create a supportive and empowering environment for your employees. When your employees thrive financially, they’re more likely to be engaged, productive, and loyal.

Next, we’ll explore fringe benefits and supplemental insurance options that can further enhance your offerings.

Fringe Benefits and Supplemental Insurance

Fringe benefits and supplemental insurance can significantly enhance your small business’s benefit package. These extras can make a job offer more enticing and show employees that you care about their well-being beyond just the basics.

Dental Care

Routine dental exams can catch not only dental issues but also chronic health issues like heart disease. Employers can choose from traditional plans where employees can see any dentist who accepts insurance or a preferred provider plan with in-network and out-of-network coverage. This flexibility can be a big plus for employees.

Eye Care

Uncorrected eyesight problems can lead to lost productivity at work. Providing a vision plan that includes comprehensive eye exams can help. Package plans or discount programs make this coverage more affordable. Healthy eyesight means fewer mistakes and more efficiency at work.

Prescription Drug Coverage

Offering prescription drug coverage is another way to keep your workforce healthy. Plans with tiered pricing are often more advantageous for employees because they can purchase various prescriptions with a co-pay. Employers might also provide a list of covered drugs so employees managing chronic conditions can easily review their options.

Life Insurance

Many people worry about the financial well-being of their dependents if they were no longer there to provide for them. Group life insurance, where the employer owns a single policy covering all workers, can provide peace of mind. Another option is to offer term life or yearly renewable coverage. To keep administration simple, life insurance can be set up as a one-time payment.

Flexible Spending Accounts (FSA)

With an FSA, employees withhold money from their pay on a pre-tax basis up to a limit preset by the IRS. They can then use these funds to cover eligible out-of-pocket health expenses like insurance copayments, deductibles, some prescription drugs, and medical devices. If any money remains in the FSA at year’s end, employees may sometimes have an additional two-and-a-half months to spend the balance; otherwise, the funds are lost.

Health Reimbursement Arrangements (HRA)

Businesses that offer group health insurance and participate in HRAs reimburse employees tax-free for qualified medical expenses up to a limit they determine each year. If employers don’t offer group health insurance, they may choose to partake in an individual coverage HRA, which helps employees offset some of the costs of plans they purchase themselves through the marketplace or elsewhere.

Premium Only Plans (POP)

Employees in these plans pay their share of insurance premiums – including health, dental, vision, disability, and life insurance – with pre-tax dollars. Because a POP reduces employees’ taxable income, employer contributions to payroll taxes and unemployment insurance may also be lower.

By incorporating these fringe benefits and supplemental insurance options into your benefit packages for small business, you can create a more comprehensive and attractive offer for your employees. These benefits not only help in retaining current employees but also make your business more appealing to potential hires.

Next, we’ll discuss how to create a benefit package for your small business, ensuring you cover all bases and meet both legal requirements and employee expectations.

How to Create a Benefit Package for Your Small Business

Creating a benefit package for your small business can seem daunting, but with the right steps, it becomes manageable. Here’s a simple guide to help you get started:

Set Goals

Start by asking yourself, What do we want to achieve with our benefits package? This could be attracting top talent, improving employee satisfaction, or reducing turnover. Clear goals will guide your decisions and ensure your benefits package aligns with your business objectives.

Determine Budget

Money matters. Figure out how much you can realistically spend on employee benefits without straining your finances. A well-designed benefits package is an investment in your workforce and your company’s future.

Legal Obligations

Know the law. Depending on your location and company size, certain benefits may be mandatory. For example, health insurance is required under the Affordable Care Act for companies with 50 or more full-time employees. Staying compliant avoids penalties and ensures fair treatment of employees.

Choose Provider

Not all benefits providers are created equal. Look for those offering quality services at competitive prices. Consider their reputation, customer service, and ease of use. Asking other businesses for recommendations can also lead you to reliable providers.

Develop Policy

Once you’ve chosen your benefits, formalize them in written policies. This includes eligibility criteria, how to enroll, and what the benefits entail. Clear, concise policies prevent misunderstandings and ensure everyone knows what’s available to them.

Use Benefits Technology

Managing benefits manually is inefficient. Invest in benefits technology that simplifies enrollment, administration, and tracking. This not only saves time but also enhances the employee experience by making benefits easily accessible.

Communicate with Employees

If employees don’t know about their benefits, they can’t use them. Use clear, simple language to explain what’s available and how to access it. Regularly scheduled information sessions, handbooks, and Q&A opportunities can help ensure employees feel informed and valued.

Seek Feedback

Listen to your employees. Regularly collect feedback on your benefits package to find out what’s working and what’s not. Surveys, suggestion boxes, and open forums can provide valuable insights that help you tweak your offerings to better meet employee needs.

By following these steps, you can create a benefits package that not only meets legal requirements but also supports your employees and your business goals. Next, we’ll explore some unique and creative benefits that can help your small business stand out.

Frequently Asked Questions about Benefit Packages for Small Business

What benefits do most small businesses offer?

Small businesses typically offer a range of essential benefits to attract and retain talent. These often include:

  • Health insurance: The cornerstone of most benefit packages. Health insurance shows employees that their well-being is a priority.
  • Dental and vision insurance: These are often overlooked but highly valued. They cover essential check-ups and treatments that can prevent more serious health issues.
  • Short-term and long-term disability insurance: These provide income protection if an employee can’t work due to illness or injury.
  • Retirement plans: Options like 401(k)s, SEP-IRAs, and SIMPLE IRAs help employees save for the future. About 69% of employers offer retirement benefits.
  • Paid time off (PTO): This includes vacation days, sick leave, and sometimes even mental health days. PTO is crucial for maintaining work-life balance.

What is a typical benefits package worth?

The cost of a benefits package can vary, but on average, benefits account for 29.4% of the total compensation for private industry employees. According to the Bureau of Labor Statistics, this translates to approximately $12.06 per hour worked.

Here’s a breakdown of some typical costs per hour worked:

  • Health insurance: $2.94
  • Paid leave: $3.26
  • Retirement plans: $1.07
  • Social Security and Medicare: $2.57
  • Workers’ compensation: $0.43

What do employees want in a benefits package?

Employees today have high expectations when it comes to benefits. Here are some of the top benefits they look for:

  • Employer-covered healthcare: This remains a top priority. Health insurance is non-negotiable for most employees.
  • Life insurance: Provides peace of mind that their families will be taken care of in case of an untimely death.
  • Pension and retirement plans: These have become increasingly important, with 82% of employees rating retirement savings as a critical benefit.
  • Mandatory paid time-off: Employees value having guaranteed time off to recharge and handle personal matters.
  • Mental health assistance: Programs that support mental health, such as Employee Assistance Programs (EAPs), are becoming more popular and essential.

By understanding these key elements, small businesses can craft a benefits package that not only meets legal requirements but also enhances employee satisfaction and retention.

Next, we’ll explore some unique and creative benefits that can help your small business stand out.


Employee benefits are more than just perks—they are a strategic tool for attracting and retaining top talent. In today’s competitive job market, offering a comprehensive benefits package can make your small business stand out.

Benefits play a crucial role in employee satisfaction and retention. They show your employees that you value their well-being and future. This can turn a job into a career and a workplace into a community.

At Tigner Financial, we understand the importance of providing benefits that matter. Our expertise in whole life insurance can be a cornerstone of your benefits package. Whole life insurance not only offers financial security for your employees’ families but also serves as a long-term financial asset.

A thoughtful benefits package can help your small business secure its financial future. By investing in your employees, you invest in your company’s success.

Let us help you create a benefits package that stands out. Visit our small business employee benefits page to learn more about how we can support your business.

In summary, a well-crafted benefits package is essential for employee satisfaction and retention. Partner with Tigner Financial to ensure your small business thrives for years to come.