The Evolving Landscape of Employee Health Benefits

As companies navigate one of the most competitive business landscapes in decades, employee health benefits have emerged as a critical component of operational success. Human Resources (HR) professionals are under immense pressure to do more with less, balancing the need to protect the bottom line while nurturing workforce engagement and attracting top talent. This economic paradox has led to the rise of innovative supplemental health benefits that extend value beyond the paycheck.

Health Benefits vs. Sign-On Bonuses

When strategizing on how to recruit and retain top talent, many employers instinctively consider offering sign-on bonuses or salary increases. While these tactics are familiar and can be compelling—who doesn’t appreciate a bonus?—they come with inherent limitations. Recent trends indicate that more employers are enhancing their benefits packages with supplemental health benefits, gaining a strategic advantage in the process.

The Drawbacks of Sign-On Bonuses

1. Perceived as Ordinary Compensation: Employees often view sign-on bonuses as just another form of compensation, indistinguishable from their regular paychecks. Interestingly, surveys reveal that 90% of employees would prefer quality healthcare benefits over a pay raise.

2. High Costs: Despite their intended value, sign-on bonuses can become costly for companies once taxes are factored in. For instance, a $5,000 bonus may end up costing the company significantly more, while providing the employee with less actual value.

3. Potential Insult to Current Employees: Offering sign-on bonuses to new hires can inadvertently offend existing employees in similar positions, who may feel they deserve comparable rewards for their loyalty.

4. Easily Forgotten: Monetary incentives are often “one-and-done,” leading employees to wonder, “What have you done for me lately?” This can result in retention challenges over time.

Health Benefits vs. Other Perks

So, why should companies invest in health benefits over other perks? The answer is straightforward: employees want them. With rising healthcare costs, candidates increasingly seek employers that offer benefits addressing their healthcare needs.

Key Statistics Supporting Health Benefits

• Employee Preference: Approximately 56% of U.S. adults covered by employer-sponsored health benefits consider their health coverage a crucial factor in deciding whether to remain with their current employer.

• Job Satisfaction: A significant 88% of employees rank health insurance as a top priority, even higher than education and retirement savings, underscoring its importance to job satisfaction.

• Top Benefit: Health insurance consistently ranks as the #1 benefit according to employee preferences.

• Impact on Recruitment and Retention: Over half of U.S. workers have switched jobs in pursuit of better benefits. Additionally, 77% of employers offering supplemental insurance acknowledge its effectiveness in supporting recruitment, while 80% verify its role in retention.

• Strategic Advantage: Companies that adapt their recruitment and retention strategies to include enhanced health benefits outperform those that do not, with 58% reporting better company performance compared to 34% of those without such strategies.

Cost-Effective Health Benefits

While health benefits are crucial for attracting and retaining skilled employees, rising healthcare costs pose a challenge for companies aiming to offer comprehensive health benefits without straining their budgets. This is where supplemental expense reimbursed insurance comes into play.

Advantages of Supplemental Expense Reimbursed Insurance

1. Carve-Out Coverage: This type of supplemental health insurance qualifies as an excepted benefit, exempt from ACA nondiscrimination rules. Employers can offer these plans to select employee classes, allowing them to enhance benefits for critical positions while keeping primary health plans consistent for all employees.

2. Robust Coverage: Unlike indemnity-based voluntary supplemental plans, supplemental expense reimbursed health insurance provides valuable coverage without disease or event-driven limitations. ArmadaCare’s products range from $5,000 to $100,000 in annual coverage, catering to various needs and budgets.

3. Tax Efficiency: Premiums for expense reimbursed insurance aren’t taxable, making these plans cost-effective and offering greater value than equivalent bonuses or pay raises. Employees also receive tax-free reimbursements for out-of-pocket healthcare costs.

4. Constant Reminder of Employer Appreciation: Every time an employee utilizes their supplemental expense reimbursement plan, they are reminded of their employer’s appreciation, fostering loyalty.

5. Built-In Loyalty Program: ArmadaCare’s plan designs can be structured into a multi-tiered loyalty program, where coverage levels increase the longer employees remain with the company, further enhancing retention.

The Bottom Line

Current trends indicate that an increasing number of employers are enhancing their employee benefit offerings with supplemental expense reimbursed insurance plans. These tax-efficient, flexible, and robust solutions provide a strategic advantage for employers looking to remain competitive in recruitment and retention efforts. With options like ArmadaCare’s supplemental expense reimbursed insurance solutions, optimizing employee health benefits becomes a win-win for both employers and employees alike.

For more information on how to enhance your employee health benefits, consider exploring ArmadaCare’s expense reimbursed insured plans today.