Can Navigate PEO save you money on your employee healthcare benefits?

by | 3 Jun, 2020

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In March 2020, The US Department of Labor released some statistics on Employee Benefits in the United States. It found that 75 percent of private industry workers had paid sick leave, only 7 percent of workers had flexible workplace benefits, 89 percent of state and local government workers had access to healthcare benefits but the cost to those employees was still around $500-1,200+ per month, among other findings. These statistics overlook the staggering numbers of Americans who are in jobs with virtually no benefits. 

The Washington Post reports that ’23 percent of Americans [have] no paid vacation and 22 percent [are] without paid holidays.’ That comes on top of the fact that America has no mandated parental leave – the only country without it amongst 41 developed nations. And often Americans are without sick leave too (around 32 million)! 

According to PBS, ‘About 44 million people in this country have no health insurance, and another 38 million have inadequate health insurance.’ The CDC website and NBC news also back up these shocking numbers. What does all this mean for Americans? Many don’t have good access to healthcare, time to recuperate and recover from work stresses, and, to make matters worse, Americans often work longer hours than those in other countries too. 

Forbes notes that fewer than 50% of Americans are happy in their jobs. And one of the main reasons is lack of benefits: ‘While it’s reported that pay has improved in recent years, job quality has not. In a time period where healthcare costs are skyrocketing, employers are offering fewer benefits now compared to the recent past. Adults aged 18 to 64 who are covered by private insurance are down 72% from 1980.’ For employers, even small businesses, one way you can remedy employee unhappiness and stress is by offering basic employee benefits. Although many companies find these cost-prohibitive, there is a way!

Can Navigate PEO save you money on your employee healthcare benefits? The answer is an unequivocal yes! As a PEO, we have the ability to provide small businesses with the type of coverage often only afforded to large corporations. 

The sectors we serve

We serve the following sectors: construction, financial, healthcare, logistics, manufacturing, nonprofit, and professional services. Because PEOs need to be experts in tax regulations and compliance issues, we serve industries where we have particular expertise. You can rest assured you’ll be in expert hands with Navigate PEO. 

The benefits we offer to you and your employees

For small businesses, insurance coverage and rates are often prohibitively expensive even for those who’d like to offer comprehensive benefits to employees. When you’re part of a PEO, you can be given a rate that meets your budget and your employee’s needs. Using a PEO mirrors the benefits of large organizations at a price small businesses can afford. 

What we can offer:

  • Major medical plans
  • Dental, vision and life insurance plans
  • Short-term and long-term disability plans
  • Employee assistant programs
  • COBRA assistance
  • 401K programs

Major medical plans

Offering basic healthcare coverage is more than just a perk to many Americans. The Society for Human Resource Management notes that Americans who like their health plan are more likely to stay in a job: ’46 percent said health insurance was either the deciding factor or a positive influence in choosing their current job.’ Forbes reports that the cost of employee turnover can ‘kill your business,’ which means that even if providing employee benefits is more expensive than not, overall, your business will thrive as a result. Plus, if you do have employees that leave, recruitment prospects will find your job more attractive if it comes with benefits, giving you more choice candidates.

Vision, dental, and life insurance plans

With vision and dental insurance, the market has even slimmer pickings. Only 35% of employees offer vision insurance and only 156 million (of 328+ million) Americans have dental insurance (with most of those coming from companies of over 500 employees). Offering vision and dental insurance will, again, make you competitive in the marketplace. 

Over half of Americans did have some life insurance coverage but there’s still a long way to go. Those without life insurance plans for employees often claim it’s too expensive but it could be an important benefit for employees since it can help cover unexpected costs associated with death, especially during unprecedented recent times. 

Short-term and long-term disability plans

For short-term and long-term disability plans, not even half of employees have coverage for short-term disability and under one-third have coverage for long-term disability. The US Bureau of Labor Statistics notes, ‘In 2018, 42 percent of private industry workers had access to short-term disability insurance plans and 34 percent to long-term plans.’ Shockingly, 12-29% of people in poverty have a disability. To support workers who are disabled or who may become disabled, short- and long-term disability plans are a must and an essential kindness for employers.

Employee assistance programs

Employee assistance programs help workers with their job performance, their health, and their mental and emotional well-being. Since we spend one-third of our lives working, it’s vital to offer some sort of EAP. SHRM reports that ‘Job-related stress is the nation’s leading workplace health problem, according to the Centers for Disease Control and Prevention, and productivity losses from absenteeism related to stress cost employers $225.8 billion, or $1,685 per employee, each year.’ Can you afford to lose over $1,000 per worker per year on average? The Wall Street Journal posits that having an EAP can save businesses money in the long run.

COBRA assistance

Many Americans haven’t heard of COBRA assistance but it allows Americans and their dependents to continue to have health insurance if one party unexpectedly loses their job or has a reduction of work hours. Employers with 20 or more full-time employees are usually mandated to offer COBRA. 

COBRA came about under The American Recovery and Reinvestment Act of 2009 and is called the Consolidated Omnibus Budget Reconciliation Act (COBRA). The program allows for those eligible to receive a ’65 percent reduction of their COBRA premiums for up to 9 months.’ Although this program is often not entirely attractive to employers and employees alike, Navigate PEO offers assistance with navigating the complicated paperwork associated with COBRA. 

401k programs

Over half of all private-sector workers aren’t participating in a retirement plan. This fact may mean that as the workforce ages, younger people won’t have the opportunity to take jobs that people aren’t leaving. Further, those who are sticking in jobs often demand higher salaries than newer, younger counterparts. (Of course, on the other hand, you’re paying for expertise.) Either way, a 401k program is an essential benefit for employees and employers often want to offer retirement plans but find them expensive or don’t know how to get past the red tape! 

SHRM notes, ‘Since Section 401(k) was added to the Internal Revenue Code in 1978, the defined contribution plan has evolved and become a handful to manage: Company leaders want the plan to be cost-effective, employees seek the best investment outcomes, and, oh yes, the lawyers are looking to be sure it complies with the law.’ Smaller companies, especially, simply find the paperwork and hassle of setting up and managing 401k programs for employees too much. Again, this is where a PEO can help. With legal and HR experts on hand, you have an extension of your HR department for a fraction of the cost of a full-time employee! Plus, with retirement benefits, potential hires will come flocking to your company! 

Our article ‘Covering All the Bases in Retirement Plans‘ discusses the benefits of joining a PEO and how you can offer your employees a company-sponsored retirement plan.

Why benefits matter to employees and employers

As you can see (we hope), offering medical plans, dental, vision, and life insurance, short- and long-term disability plans, EAP, and 401k programs will enrich the lives of your employees, save you money in the long-term (with better retention and fewer lost working days), and make your workplace attractive overall. Benefits simply make employees happier to work where they work which means they are more likely to stay there long term.

In our piece, ‘Offering Benefits to a Multigenerational Workforce,’ we discuss which benefits matter to the five generations who are likely to work for your company and our article on benefits trends to look out for talks about the trends that companies are moving towards and why benefits are vital for your employees.

Reduce risks with a PEO

You may agree that these benefits may be cost-effective for your business but you might worry about being compliant and understanding how to fill out the paperwork and manage these benefits. Not to worry! Again, that’s where a PEO comes in handy. We mitigate risks and take on the payroll and HR functions for you (as many or as few as you like). 

We can also deal with workers’ compensation claims, OSHA compliance and safety programs, return to work programs, and much more. Find out what we offer on our Services page. 

Want to see what a PEO can do for your business Read more in our piece, ‘What a PEO is and the Benefits it can Provide for Growing Organizations,’ to find out all the ways you can save with a Professional Employer Organization. 

We invest in other businesses

We aren’t just about the bottom line. We truly care about the success of other businesses and the workforce overall. We’d like to see happy employers and employees offering benefits packages that make more people happy!

In addition to our day job, we like to support causes and give back to our local community. Check out our Corporate giving page. We believe businesses should benefit the community and the lives of employees.

Want to find out more?

Now whether you choose to provide paid vacation, paid sick leave, parental leave, and fewer work hours, that’s up to you, but we can save you money on employee benefits to create a better, healthier, and happier workplace for all.

Find out how we can save you money while offering your employees more with our HR Savings calculator.

Tom DiSilva
Tom DiSilva has been providing professional human resource services for over 30 years. As the CEO of Navigate PEO, he actively partners with organizations of all sizes in the Greater New England area and across the country to help their businesses grow. He has expertise in HR and Labor Management, offering guidance and support for key areas of business such as negotiations, operations management, employee coaching, and employee benefits design. He is an active member of The Society for Human Resource Management (SHRM), The National Association of Professional Employer Organizations (NAPEO), Professional Association of Co-Employers (PACE), and The American Payroll Association (APA). He is deeply committed to giving back to the community both personally and through Navigate Cares, which provides support for several nonprofit organizations such as the USO, The Boys & Girls Club, and the 3Point Foundation.

Continue reading helpful HR articles from Tom.

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Disclaimer: this article does not represent expert advice and is provided for informational purposes. Please get in touch if you would like expert HR advice.