How much do you know about employee benefit packages? If you are like a lot of other business owners or managers, you probably consider yourself fairly knowledgeable. Maybe you are. On the other hand, maybe you're not. Perhaps you believe some of the many myths that pervade this one area of HR.
We felt it was time to do our part to bust the worst of the employee benefit myths out there. The more you know about how benefits really work, the better able you will be to make sound decisions for your company. Whatever you do, don't believe something you hear just because someone else told you. Do yourself and your company a favor by researching the truth about employee benefits.
Myth #1: Employee Benefits Are Too Expensive
The most damaging myth is the one that says employee benefits are too expensive to offer. It's like anything else. You have to shop around to find an affordable deal. To that end, employee benefits are a lot like car insurance, homeowners’ insurance, and so forth.
Yes, there are benefits packages that are extremely expensive. Smartphones from Apple and Samsung are pretty expensive too, but you don't have to buy one. You can buy another brand that is equally reliable at a fraction of the cost. Benefits packages work the same way. Here at BenefitMall for example, we offer a very innovative 401(k) plan that is probably very affordable for your business.
Myth #2: Employees Always Choose Salary over Benefits
While it is true that we all work to earn a paycheck, it is not always true that employees choose salary over benefits. There are some very valid reasons for preferring a stronger benefits package. For example, health insurance benefits are tax-free. Health insurance is also expensive. We would wager that the average employee is willing to sacrifice a higher salary in exchange for affordable health insurance.
Myth #3: Congress Got Rid of the ACA Employer Mandate
One of the more recent myths is that the tax bill passed by Congress and signed by the president this past December eliminates the employer mandate of the Affordable Care Act (ACA). Not true. Congress eliminated the individual mandate only. That means beginning in 2019, workers can refuse a company health insurance plan without penalty. As things stand right now though, companies are still obligated to offer a plan that qualifies under the ACA.
Myth #4: Employees Are Happy with Health Insurance
Next on our list is the idea that workers are happy with just a good health insurance package and nothing more. That may have been true years ago, but it isn't anymore. The ACA took care of that. Now employees routinely expect more. Not only do they want healthcare plans with vision and dental cover, they are expecting additional benefits as well. We are talking 401(k) plans, paid time off, flexible scheduling, and so forth.
Myth #5: All Benefits Have a Cash Equivalent
Finally, a lot of business owners seem to believe that all employee benefits have a cash equivalent. In other words, health insurance has a cash equivalent because both the employer and employee are contributing to pay the premiums. But there are other benefits with no cash value. Maybe your company provides free lunch every Friday. There's just one example. Sometimes it's those kinds of benefits that do the most for improving employee morale.
There are plenty of other myths we have not covered in this space. The truth is that there is a lot to learn about employee benefits. We would be happy to help you figure it out for your business.