What Are the Benefits of Employee Benefit Packages?

Employee benefits plans help attract and retain good workers

A strong employee benefits plan is an essential part of an employee's total compensation package. Employees gain by having easy and inexpensive access to important insurance coverage and having a way to fund their retirement. Employers benefit by having a happier, more productive workforce resulting in less turnover.

Recruitment and Retention

For the employer, a strong fringe benefits program coupled with an attractive salary can help attract talented employees. If existing employees are happy with features of their benefits plan, like low-cost health insurance, they may be more inclined to stay with the company.

Reduced Cost

Employees will usually find their benefits are cheaper through the company than if they tried to purchase them on the individual market. Group health insurance, for example, is less expensive than purchasing an individual policy from a private carrier. The employers benefit by being able to write off the cost of many benefits as a business expense on their tax returns.

Guaranteed Issue

When purchasing health, life or disability insurance on the open market, the employees are often subject to individual underwriting, which means they could be denied coverage for certain preexisting conditions. Employee benefit insurance plans, however, are typically subject to group underwriting and they will be guaranteed coverage regardless of medical history.

Availabity of Options

Some employers offer several choices of benefits. For example, they may offer three or four different health plans with a variety of deductibles, or offer life insurance with a choice of several different amounts of coverage. This gives employees the opportunity to customize their benefits package to met their specific needs.

Company Assistance

The employer handles much of the administrative work for the employee, which can save the employee from having to get deeply involved in paperwork and red tape. If an employee has a question or problem, they can contact the human resources department or plan administrator for assistance.

References

• Life Benefits: Advantages of Group Benefits
• LSM Insurance: Group Benefits Plan