Most major, well-established companies offer employees a package of services called employee benefits. These generally include health and dental insurance, retirement plans like 401k, overtime pay, and paid time off. Some firms may provide additional benefits and perks like vision insurance, disability insurance, commuter benefits, discounted gym memberships, and free access to public forums like museums.
Are Employee Benefits Important?
A recent report from the Bureau of Labor Statistics revealed that 75% of medium and large companies surveyed offered medical insurance, and nearly all of those companies required employees to contribute partially toward the cost. The survey also found that the average number of annual paid holidays offered by mid-to-large-sized companies in the United States is 10 and that, on average, 9.4 vacation days are used after a year’s worth of work.
These types of benefits — which are often established in an employment contract or other agreement — can often lead to employees remaining longer with an organization or company and becoming more motivated and productive. It’s important for business owners and human resources executives to be informed about what types of employee benefits they are legally required to provide and whether or not employees are allowed to negotiate these benefits.
Mandated Employee Benefits
There are seven employee benefits that are required by federal or state law: disability insurance, the Family and Medical Leave Act, minimum wage, overtime pay, unemployment benefits, workers compensation (payment for workers who become ill or injured on the job), and COBRA (Consolidated Omnibus Budget Reconciliation Act). COBRA lasts for 18 months or longer and provides certain employees, retirees and their relatives who lose benefits the option to continue their health benefits from their group health plan at group rates for limited amounts of time. Eligibility for COBRA depends on factors like voluntary or involuntary job loss, transition between jobs, and life events like divorce and death.
Some states like California, New York and New Jersey have state-sponsored disability insurance programs.
Understanding Types of Employee Benefits
Companies that have larger revenue often provide their employees with benefits that aren’t legally required because of social responsibility concerns. Some of these types of benefits can include maternity leave, sick leave, fitness, child care, a retirement plan, life insurance, and paid vacation leave. Severance pay, hazard pay, and paid holidays are also among the types of employee benefits that companies can provide.
Some of the more high-end perks companies can offer include discounted health club memberships, tuition/student loan reimbursement, daycare, and even on-site dry cleaning in certain cases.
Health Insurance Options & Coverage
Employers will often provide workers with one of two types of medical insurance plans: Preferred Provider Organizations (PPOs) and Health Maintenance Organizations (HMOs). Deductibles, copays, and out-of-pocket expenses typically vary depending on the type of plan. PPOs usually have higher premiums than HMOs despite more limitations on the types of in-network doctors and providers.
Companies must provide health insurance to employees who work at least 30 hours per week. The Affordable Care Act (ACA) also dictates additional minimum standards for coverage. The law states that most companies with 50 or more employees are obligated to provide health insurance, and that individuals must obtain a plan either through an employer or through an online marketplace or risk paying a penalty.
Dental Care Plan Coverage
Although dental insurance plans vary from one organization to another, they usually fall under three categories: Preventative (exams, x-rays, fluoride treatments), Basic (fillings, root canals, crowns), and Major services — which can vary from two cleanings a year to oral surgeries, dentures, and wisdom teeth removal.
Fringe Benefits & Perks
Also sometimes referred to as “benefits in kind,” less-frequent perks companies may offer include tuition reimbursement, free meals, use of a company car, stock options, and discounts on company products and services. These types of benefits are not legally required and employees cannot exchange these perks for a higher salary.
Speak to Professional PEO Consultants
Speak to the professional PEO consultants at BenefitCorp in Dallas or Denver to learn more about what types of benefits you as a business owner or HR executive are legally obligated to provide to your employees.
Founded in 1995, BenefitCorp strives to ensure quality assurance of corporate payroll, HR, insurance, and retirement benefits for both small and large business clients. BenefitCorp has no ties to specific incentives or brands, and we tailor solutions to each client depending on their individual goals and needs. BenefitCorp also works with individuals and families and has partnered with RediCare VIP to provide affordable health insurance with no copays, deductibles, or even appointments needed — not to mention priority, 24/7 access to care. Call BenefitCorp today for a consultation.