Countering the FSA Non-Participation Trend
Health care flexible spending accounts (FSAs) offer employees a real bang for their buck. The cost savings should be apparent: A $100 pre-tax contribution to an FSA pays for $100 of health care expenses, whereas without the FSA only the net remaining from the $100 after taxes—possibly a reduction of $30 or more—would be available to spend.
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Pick the Voluntary Benefits Which Best Fit Your Workplace
Employers want the benefits they offer to be well received by employees, whether they are part of a core benefits package or a supplemental, voluntary offering. A benefits package, if correctly designed, can be a critical tool in retaining current workers and attracting qualified new employees. Changing workforce demographics—including the aging of the workforce, the large number of single parents and households in which both parents work, and the growing number of working individuals with eldercare responsibilities—call for benefits packages that employees can tailor to their individual needs. Today’s workers have more diverse needs than those of past generations, making the one-size-fits-all benefits formula obsolete. Furthermore, changes to core benefits that have shifted more responsibility to employees for traditionally provided types of coverage have made supplemental offerings more essential.
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Pension Protection Act Encourages 401(k) Automatic Enrollment, Investment Advice
Automatic enrollment, investment advice for plan participants and other encouragement of retirement savings are facilitated by the Pension Protection Act of 2006. While much of the law has to do with defined benefit pension plan funding and cash balance plan requirements, important provisions address defined contribution and 401(k) plans. The effective dates of these provisions vary, with most applying to 2007 or 2008 plan years.
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Executive Long-Term Care Plans Are Growing in Popularity for Small and Medium-Sized Businesses
Providing executives with long-term care (LTC) coverage is becoming increasingly more prevalent. Small and medium-sized companies realize that offering LTC benefits can help them attract and retain quality senior managerial staff. In the past, these employees would have been lost in a bidding war with a larger company who could offer the employee a bigger paycheck. As medical costs continue to skyrocket and individuals face the likelihood of living well into their eighties and nineties, however, employees are foregoing larger salaries in favor of benefits, such as LTC coverage.
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