Voluntary employee benefits make for great small business employee benefit packages for maternity. This is most true when these employers want to attract and retain a female workforce in the growing family life stage. Maternity benefits are just too expensive for employers to offer, and small businesses often feel this the most.
Voluntary employee benefits are a great way for any size employer: large, medium, and small businesses to provide a robust set of maternity benefits to attract female employees, without adding to direct cost. Consider some of the unique challenges:
- Health care costs are higher - normal pregnancies drive up costs of care, while complications and premature birth drive expenses off the charts. Fill holes with supplemental maternity insurance.
- Maternity pay is unrealistic - many small businesses can’t pay someone who is not working. Allow employees to purchase short term disability for maternity leave.
- Legal compliance is complex - There are a variety of maternity leave regulations that may apply.
Small Business Employee Benefit Packages
One of the most common statements made by site visitors relates to employer size. We often hear “my employer is a small business and can’t afford to offer a good employee benefits package.” The reality is far different.
Small businesses with as few as three benefit eligible employees qualify to offer voluntary employee benefit programs. The definition of “benefits eligible employee” has plenty of wiggle room. It does not necessarily mean that the small business employer is making a contribution towards small business health insurance premiums. It means that any paid worker for whom the business is willing to withhold a payroll deduction.
Small Business Paid Maternity Leave
Voluntary employee benefit programs allow for small business employee benefit packages that include paid maternity leave options. You hear in the media that the United States does not have this benefit. But small businesses can easily afford to hire and retain female employees of childbearing age, while promising this entitlement.
Two supplemental health insurance options can be offered by small businesses as part of their employee benefits package. Short term disability and hospital indemnity insurance both make payments directly to employees for normal childbirth. Employees pay the premium themselves so there is no direct cost to small business owners. The only cost is the administration of a payroll deduction.
Small Business Benefits Administration
Small business employee benefit packages face the same administration challenges as larger businesses. There are legal compliance issues, and need for consistent documentation. Small businesses face these same challenges but often can’t afford the sophisticated employee benefits administration software purchase, installation, and maintenance costs.
By offering voluntary employee benefit programs, small businesses gain access to advanced benefits enrollment systems. Carriers provide access to these systems as a value added service. Access to these systems works best when small business employers conduct a mandatory enrollment. Each employee logs into the system to verify they were given a chance to participate.
Small Business Tax Savings Benefits
Flexible spending accounts make for an affordable small business employee benefit package offering. Many small business employees with growing families find a variety of eligible expenses. The service fees charged by third party administrators can often by overcome by payroll tax savings.
Many small businesses may have employees with children in day care. Each employee with a child in day care may reduce the amount of payroll taxes paid by the business. The employee may contribute up to $5,000 annually. At a7.65% rate both the employee and the small business reduce their FICA obligation by $380 each year.
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