In order for a small company to succeed in a notoriously competitive market like Los Angeles, founders need to attract and retain the best and the brightest. According to a 2016 survey conducted by Glassdoor, quality benefits are a key driver of employee satisfaction. However, given that small firms operate with tight profit margins, owners are rightly wary about providing pricey benefits that will hurt their bottom lines. Thankfully, there are a few different tax-free fringe benefits that small businesses can offer to bolster their recruitment and retention efforts.
Health Savings Accounts
If your company already offers high deductible health plans to its employees, you should consider sweetening the pot by offering health savings accounts (HSAs). These accounts are used to pay for the qualified medical expenses incurred by an employee and their qualified dependents that aren’t reimbursed by their health insurance plans. Employer contributions are tax-exempt, can be rolled over year to year and accrue interest, which is also tax-exempt. As of 2017, the maximum for employer HAS contributions are $3,400 for individual and $6,750 for family coverage.
If your staff includes older adults and employees with families, HSAs are an especially good idea. For your aging workers, HSAs serve as appealing retirement benefit as they can use their HSAs to cover Medicare premiums. For employees with families, HSAs can help them cope with the rising costs of keeping an entire household healthy.
In recent years, the US labor force has undergone a massive change; Millennials have become its largest generational demographic. As part of this shift, employers in every industry have found that this new generation has new benefit preferences. Most prominent among those preferences is a desire to expand their horizons with additional skills training.
You can make your organization more appealing to talented Millennials by offering to cover some of their continuing education costs. As an employer, you can pay for $5,250 per year of your workers’ educational expenses, including tuition, fees and textbooks, tax-free. In addition to keeping your workforce happy, one study out of the University of Texas at Austin found that companies that invest in their workers’ educational development experience increases in productivity and overall profitability.
Another notable core value held by Millennial workers is a preference for working for and shopping with companies that are committed to environmental sustainability. As an expression of that value, one study found that 78 percent of Millennials want to work for companies that they can reach via public mass transit. To that end, you should take advantage of the federal government’s tax exemption regarding transit passes.
Making free transit passes part of your standard compensation package kills two birds with one stone. It saves your workforce money and it demonstrates that you are sympathetic to the younger generation’s cultural values.
To learn more about affordable healthcare plans for your small business, visit Anthem.
For more tips and inspiration for small business owners, visit Small Business Pulse Los Angeles.