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  • As life expectancy increases and social security benefits remain uncertain, the importance of personal retirement savings grows. Vanguard’s How America Saves 2023 report found that more Americans than ever before (83%) are actively saving for retirement. This number is up eight percentage points since 2013.

    One critical component of a robust retirement plan is the employer’s contribution to an employee’s retirement savings. These contributions significantly enhance employees’ ability to build a substantial nest egg for their retirement. Not all companies provide 401(k) matching programs, but by investing in your employees’ future, you demonstrate that you value them beyond their contributions to the workplace. This commitment enhances your appeal as a competitive employer, aiding in both recruitment and retention.

    Understanding Employer Contributions

    Employer contributions refer to the funds that employers add to their employees’ retirement savings accounts, such as 401(k) plans, 403(b) plans, or other defined contribution plans. These contributions can come in various forms, including matching, non-elective, and profit-sharing contributions.

    Employer contributions are a popular benefit, especially in companies offering a 401(k) plan. In 2021, ICI Research found that 90% of 401(k) plan participants received employer contributions to their retirement savings. The average employer contribution across plans reached a record high of 4.8% in Q1 of 2023.

    Three Types Of Employer Contributions

    The type of contribution you offer employees will ultimately depend on several factors, including company financial health, competitive considerations, employee needs and preferences, regulatory requirements, and the overall benefits strategy. There are three popular types of contributions to choose from.

    1. Matching contributions

    Employers match a percentage of the employee’s contributions to their retirement account. For example, an employer might match 50% of the employee’s contributions up to 6% of their salary. If an employee earns $50,000 annually and contributes 6% ($3,000) to their 401(k), the employer would contribute an additional $1,500.

    1. Non-elective contributions

    Employers contribute a fixed amount to employee retirement accounts regardless of whether the employee makes their contributions. This ensures that all eligible employees receive a retirement benefit.

    1. Profit-sharing contributions

    Employers share a portion of the   with employees by contributing to their retirement accounts. This type of contribution can vary yearly based on the company’s profitability.

    Benefits Of Employer Contributions

    Benefits for employees:

    Increased retirement savings

    Employer contributions significantly boost the total retirement savings of employees. For instance, an employer match can add thousands of dollars to an employee’s retirement fund over time, which can compound and grow substantially.

    Incentive to save

    Matching contributions are a powerful incentive for employees to contribute to their retirement accounts. Knowing that their employer will add extra money if they save encourages employees to participate in retirement plans and contribute more than they might have otherwise.

    Tax advantages

    Employer contributions, like employee contributions, often come with tax benefits. Contributions to retirement accounts are typically made on a pre-tax basis, reducing the employee’s taxable income. Additionally, the growth of these contributions is tax-deferred until withdrawal.

    Financial security

    With employer contributions, employees can feel more secure about their financial future. The additional funds help build a larger retirement cushion, which is crucial for maintaining a comfortable lifestyle in retirement.

    Benefits for employers:

    Attracting and retaining talent

    Offering competitive retirement benefits, including employer contributions, helps attract top talent. Employees value retirement benefits, and a generous contribution policy can be a crucial differentiator in a competitive job market.

    Employee satisfaction and loyalty

    Retirement contributions are a form of investment in employees’ futures, which can lead to increased job satisfaction and loyalty. Employees who feel supported in their long-term financial goals are more likely to remain with the company and contribute positively to its success.

    Tax deductions

    Employers can benefit from tax deductions for their contributions to employees’ retirement plans. These deductions can offset some of the costs associated with providing these benefits.

    Enhanced company culture

    Providing robust retirement benefits can enhance the overall company culture. It demonstrates that you value your team and are committed to their long-term well-being.

    The Impact Of Employer Contributions On Retirement Savings

    The additional funds from employer contributions can significantly enhance the compounding effect: the more money invested early on, the more potential for growth over time. For instance, a $1,000 contribution at age 30 can grow significantly more than a $1,000 contribution at age 50 due to the longer time for compounding. Additionally, employer contributions can: 

    • Increase participation rates: Employer matching contributions often lead to higher participation rates in retirement plans. Employees are more likely to enroll and contribute to their plans when they know they will receive additional funds from their employer.
    • Balance retirement portfolios: Employees can diversify their retirement portfolios more effectively with additional contributions. This diversification can help manage risk and potentially lead to better investment outcomes over the long term.
    • Reduce retirement savings gaps: Employer contributions help bridge the retirement savings gap, particularly for employees who cannot contribute significantly. This is especially important for lower-income workers who might otherwise struggle to save adequately for retirement.

    Managing And Planning Employer Contributions With GMS

    Employer contributions to employee retirement savings are a vital component of a successful retirement plan. They provide significant financial benefits, savings incentives, and enhanced economic security for employees. For employers, offering generous retirement contributions can attract and retain top talent, foster loyalty, and improve company culture.

    By understanding the types of employer contributions and strategies for maximizing their benefits, employees can ensure they are well-prepared for a financially secure retirement. Ultimately, employer contributions not only support individual employees but also contribute to a more stable and prosperous workforce.

    If you’re thinking about offering your employees a retirement plan, consider partnering with a professional employer organization (PEO) like Group Management Services (GMS). With experience supporting over 3,500 businesses in managing payroll, human resources, risk management, and benefits, including 401(k) plans, GMS provides affordable solutions comparable to larger corporations.

    Interested in enhancing your business’s retirement plan offerings? Learn more about how GMS can support your company’s needs. 

  • Selecting the right retirement plan for your small business is a crucial decision that can impact your ability to attract and retain talent. It’s essential to carefully evaluate your business’s needs and goals to choose the most suitable retirement plan. Numerous options are available, each with its own rules, benefits, and limitations. Knowing the pros and cons of each one can help you make an informed decision.

    Why Offer A Retirement Plan?

    The Center for Retirement Research found that only 46% of small businesses offered a retirement plan. A 2023 Capital Group survey reported that 40% of small business owners didn’t believe their company was large enough for a retirement plan option. The same study found that 32% of small business owners feel they lack the knowledge to offer retirement plans while keeping their businesses afloat.

    However, despite these hesitations, there are several compelling reasons why offering a retirement plan will benefit your small business:

    • Attract and retain talent: A competitive retirement plan can help you stand out to potential employees and retain current ones. Many job seekers consider retirement benefits a key factor when evaluating job offers.
    • Tax advantages: Retirement plans can provide significant tax advantages for both employers and employees. Employer contributions are typically tax-deductible, and employees can defer taxes on their retirement savings until withdrawal. Additionally, the SECURE Act of 2022 offers a tax credit to small businesses that offer retirement plans and a bonus credit if that plan offers automatic enrollment.
    • Employee financial security: Helping employees save for retirement can increase their economic security and overall job satisfaction, leading to a more motivated and productive workforce.
    • Owner benefits: As a business owner, you can also personally benefit from a retirement plan by saving for your retirement in a tax-advantaged manner.

    Types Of Retirement Plans For Small Businesses

    Choosing the right plan for you and your team can be a complex process; the most common options include:

    Simplified Employee Pension (SEP) Individual Retirement Account (IRA)

    SEP IRAs are designed for self-employed individuals and small business owners. They are easy to set up and maintain, with low administrative costs. Only the employer contributes to the plan, and contribution limits are high. Employers can contribute up to 25% of each employees’ compensation, up to a maximum of $69,000 for 2024. Contributions are tax-deductible for the employer, and employees are immediately 100% vested in their SEP IRAs.

    Pros:

    • Simple to administer.
    • Flexible annual contributions, allowing adjustments based on your business profitability.
    • High contribution limits.

    Cons:

    • Only the employer can contribute.
    • Contribution amounts must be the same percentage for all eligible employees.

    Savings Incentive Match Plan For Employees (SIMPLE) IRA

    SIMPLE IRAs are ideal for businesses with 100 or fewer employees. They are relatively easy to set up and administer. Both employers and employees can contribute to the plan. Employees can contribute up to $16,000 annually for 2024, with an additional $3,500 catch-up contribution for those aged 50 and over.

    Employers must match employee contributions dollar-for-dollar up to 3% of compensation or make a 2% non-elective contribution for all eligible employees. Employer contributions are tax-deductible.

    Pros:

    • Easy to set up and manage.
    • Encourages employee participation through matching contributions.
    • Lower administrative costs compared to 401(k) plans.

    Cons:

    • Lower contribution limits compared to SEP IRAs and 401(k) plans.
    • Employer contributions are mandatory, which can financially burden some businesses.

    401(k) Plan

    401(k) plans are one of the most popular retirement plans for businesses of all sizes. These plans can include features such as Roth contributions, loan provisions, and automatic enrollment. They offer flexibility and higher contribution limits.

    Both employers and employees can contribute to the plan. Employees can contribute up to $23,000 annually for 2024, with an additional $7,500 catch-up contribution for those aged 50 and over. Employers can choose to match employee contributions or make non-elective contributions. All employer contributions are tax-deductible. Employers can also set up profit-sharing contributions.

    Pros:

    • High contribution limits.
    • Flexibility in plan design and employer contributions.
    • Encourages significant employee participation and savings.
    • Attractive to potential employees.

    Cons:

    • Higher administrative and compliance costs.
    • It is more complex to set up and maintain than SEP and SIMPLE IRAs.

    Defined Benefit Plan

    Defined benefit plans, or pension plans, promise a specific retirement benefit amount based on a formula considering factors such as salary history and years of service. In this plan, the employer contributes enough to fund the promised benefit. According to the IRS, this amount is “100% of the participant’s average compensation for his or her highest three consecutive calendar years or $275,000 for 2024.” This plan’s higher contribution limits allow for potentially substantial retirement savings.

    Pros:

    • Provides a guaranteed retirement benefit.
    • High contribution limits.
    • Attractive to employees seeking retirement security.

    Cons:

    • Complex and costly to administer.
    • Employer bears investment risk and funding responsibility.
    • Less flexibility in adjusting contribution amounts.

    Factors To Consider When Choosing A Retirement Plan

    1. Business size and structure: The number of employees and your business structure (e.g., sole proprietorship, partnership, corporation) can influence the suitability of different plans. However, don’t let size be your reason for avoiding a plan altogether. The Employee Benefit Research Institute found that a business that is too small or not established enough was the most cited reason for not offering a plan. In many cases, this isn’t true.
    2. Employee needs and preferences: Understanding your employees’ retirement goals and preferences can help you choose a plan that meets their needs and encourages participation.
    3. Budget and administrative capacity: Consider the costs of setting up and maintaining the plan, including administrative fees and required employer contributions.
    4. Tax benefits: Assess the tax advantages of different plans for the business and employees.
    5. Flexibility and customization: Some plans offer more flexibility regarding contributions, investment options, and plan features. Determine how much flexibility you need to meet your business and employee needs.

    By understanding the different types of retirement plans available and their respective benefits and limitations, you can select a plan that not only helps you attract and retain top talent but also provides valuable financial security for you and your employees.

    The good news is you don’t have to do it alone.

    A professional employer organization (PEO), like GMS, can transform your small business’s retirement plan offerings. With a proven track record of helping over 3,500 companies with p and 401(k) plans, GMS delivers cost-effective solutions that rival larger firms.

    Ready to elevate your retirement benefits? Click here to learn more about how GMS can help you set up a retirement plan best suited for your small business.

  • While it’s crucial to foster a positive work culture and build a reputation as a caring employer, evaluating the benefits you offer is equally important. With inflation and the rising cost of living, nearly 79% of Americans believe the country is facing a retirement savings crisis, and 55% are concerned with securing enough financial stability for their retirement.

    Financial insecurity can be a major stressor. It can affect productivity, leading to disengagement and absenteeism in the long term.  You can alleviate some of this stress by offering a 401(k) plan to help your team prepare for retirement. Most people aim to spend their later years comfortably enjoying their retirement, so providing a quality 401(k) plan can help your business attract and retain quality employees.

    Avoid Financial Confusion: Educate Your Group

    Retirement is not always straightforward, as financial choices can be intimidating and confusing for many employees. However, understanding retirement plans like a 401(k) is critical. Ensure you’re taking the time to review educational resources or training with your team to eliminate confusion and simplify choices.

    What is a 401(k) Plan? 

    Seven Elements Of A Competitive 401(k) Plan

    1. Generous employer match

    A generous employer match is one of the most sought-after features in a 401(k) plan. An employer match is when an employee contributes a portion of their salary to their retirement account, and the employer matches a certain percentage of that contribution, effectively adding free money to the employee’s retirement savings. According to Vanguard’s annual report on investing behavior, employers’ average match was 4.6% of pay, while the highest percentage was 6.99%. 

    A higher match not only demonstrates that you value the long-term financial wellness of your workforce but also serves as a powerful incentive for employees to contribute more to their retirement accounts. It effectively doubles the impact of their contributions, making it a highly attractive benefit. Employees view a strong match as a direct investment in their future, which can be a critical factor in recruitment and retention. By offering a generous employer match, you can differentiate your company in a competitive job market and build a stronger, more loyal team.

    2. “Day one” eligibility

    “Day one eligibility” refers to a policy where employees are eligible to participate in certain benefits, such as a 401(k) plan from their first day of employment. This means that new hires do not have to wait through a probationary period or a set number of days before they can begin contributing to a retirement plan. Providing new hires with immediate eligibility helps ensure they don’t lose ground in terms of saving. Seventy-four percent of plans now allow workers to make pretax contributions immediately after hire. In addition, 53% of plans have corresponding immediate eligibility for employer-matching contributions, while 50% of plans that offer a non-matching employer contribution allow immediate eligibility.

    3. Immediate vesting schedule

    An immediate vesting schedule allows employees to gain full ownership of employer contributions from the moment they are made. Unlike traditional vesting schedules, which may require employees to stay with a company for several years before they can access the full benefits of their employer’s match, immediate vesting grants instant control over contributions. It gives employees the peace of mind that the contributions made on their behalf are truly theirs to keep, regardless of their tenure with the company.

    While it might seem counterintuitive, offering an immediate vesting schedule can be a powerful tool to attract top talent, especially in competitive industries. It signals a commitment to your team’s financial security. It shows that you’re confident in your business’s value without the need to tie employees down with restrictive vesting terms. Additionally, it can lead to greater employee satisfaction and loyalty, as workers feel more secure in their financial planning and more appreciated by their employer.

    4. Low, transparent plan fees

    Typically, 401(k) plans have administrative fees that charge you to maintain the account. Admin fees cover record keeping, accounting, legal services, and investor education services.  Investment fees on the other hand cover expenses associated with managing the plan’s funds.

    Both types of fees are deducted from your employees’ 401(k) assets. Finding plans with lower fees and educating your employees on how the fees are being applied can help set your company’s 401(k) package apart from your competition.

    5. Investment options

    When finding a 401(k) plan, select only a handful of investment options. This can include individual mutual funds, asset allocation funds, and target-date funds, many of which automatically become more conservative as the employees approach retirement. 

    While offering choices is beneficial, it’s important not to overload your team. It’s possible to present employees with too many options. Researchers have found that for every 10 options added to your plan, participation drops by 1.5-2%. To avoid overwhelming your employees, be selective in the choices you put in front of your team.

    6. Automatic enrollment and raises

    Automatic 401(k) plan enrollment has gained popularity for its ability to simplify retirement savings. With automatic enrollment, employees are enrolled in the company’s 401(k) plan by default, often with a pre-set contribution rate, unless they choose to opt-out.

    Automatic enrollment can significantly increase participation rates in 401(k) plans by nearly 15%, particularly among younger or new employees. It eliminates common barriers to entry, such as the initial sign up or the uncertainty about how much to contribute. By making retirement savings the default option, you can help your staff build financial security from day one.

    In addition to automatic enrollment, including automatic contribution raises (often referred to as automatic escalation) further enhances the effectiveness of a 401(k) plan. Automatic raises typically increase an employee’s contribution rate by a set percentage each year, usually aligned with annual salary increases or at the start of a new plan year.

    7. Give employees access to expert financial resources

    Providing employees with access to expert financial resources is essential to a well-rounded 401(k) plan. Many employees, especially those new to investing or retirement planning, may feel overwhelmed or uncertain about maximizing their 401(k) options. By providing access to financial advisors, educational workshops, and online tools, employers can empower their workforce to make informed decisions about their financial future.

    401(k) Plans With GMS

    If you’re looking to offer a competitive retirement plan but don’t have the time or energy to dedicate to finding one, we can help. Partnering with a professional employer organization (PEO), like GMS, ensures you can offer the best plan for your team without the hassle. Our retirement experts will help you find the best options for you and your team to remain competitive in today’s tightening labor force. Contact us today and connect with one of our experts!

  • A Texas federal judge recently struck down the Federal Trade Commission’s (FTC) proposed nationwide ban on non-compete agreements, which was set to take effect in early September. This ruling means that employers can continue to enforce non-compete clauses according to their state laws. However, with ongoing legal challenges and the evolving regulatory landscape, it’s crucial for employers to stay informed and prepared for potential changes.  

    Understanding The Ruling 

    The FTC’s proposed rule aimed to ban non-compete agreements nationwide, a move that was met with significant pushback from the business community. In response, a Texas employer, the U.S. Chamber of Commerce, and other organizations filed a lawsuit challenging the FTC’s authority to impose such a ban. The case was heard by Judge Ada Brown of the Northern District of Texas, who ruled that the FTC overstepped its authority and the proposed ban was invalid. 

    Judge Brown’s decision was based on two key arguments: 

    1. The FTC does not have the power to issue substantive rules, as Congress only authorized the agency to establish procedural rules to address unfair competition.
    2. The rule itself was deemed “arbitrary and capricious” due to its broad and blanket approach, which failed to consider state-specific laws.

    As a result of this ruling, the non-compete ban has been blocked nationwide, allowing employers to continue using non-compete agreements as permitted by state law. 

    Why You Should Stay Informed 

    While the immediate threat of a nationwide ban has been neutralized, the FTC may appeal the ruling in the coming weeks. That said, employers should remain vigilant. The FTC may still pursue case-by-case enforcement actions against non-compete agreements, and the legal landscape could shift again if higher courts weigh in. Now is the time for employers to ensure their non-competes are compliant with state laws and tailored to protect their business interests without overreaching.  

    Implications For Employers 

    Employers should review their existing non-compete agreements and ensure they are narrowly tailored to meet the specific requirements of the states where they operate. It’s also wise to compile an inventory of all restrictive covenants, including those involving former employees, to ensure you are prepared for potential future legal challenges. 

    Partner with GMS To Navigate Complex Employment Laws 

    Navigating the complexities of employment law, especially with the potential for rapid changes, can be challenging. That’s where GMS comes in. As a professional employer organization (PEO), we provide comprehensive support to help you stay compliant with the latest rules and regulations, including those surrounding non-compete agreements. Our expert team keeps you informed and ensures that your business is protected while allowing you to focus on growing your business.  

    Stay informed, stay compliant, and let GMS be your partner in navigating the complexities of employment law. Contact us today to learn how we can help your business succeed in an ever-changing legal environment. 

  • Retaining top talent is crucial for the success of any small business. High employee turnover leads to increased costs, operational disruptions, and a negative impact on both productivity and workplace morale. Of the average 3.8% turnover rate, more than half are employees voluntarily leaving their positions. Common reasons for voluntary departures include inadequate benefits, limited career growth opportunities, and poor work-life balance.

    As a business owner, you have significant influence over employee retention. A comprehensive benefits plan can address key turnover-related factors, providing more financial support and nurturing a more stable workforce. By incorporating options like Flexible Spending Accounts (FSAs) into your benefits package, you offer employees a valuable tool to manage their expenses with tax advantages. This financial benefit not only reduces out-of-pocket costs but also boosts overall job satisfaction and loyalty.

    How Do FSAs Work?

    FSAs enable employees to reserve a portion of their paycheck into a tax-free account used for eligible expenses, such as medical treatments, dental cleanings, and more. Additionally, employers can contribute to their employees’ FSAs, but it is not a requirement.

    There are different types of FSAs tailored to specific needs:

    The Advantages Of Offering FSAs

    Integrating FSAs into your plan provides a range of benefits for both your business and your employees, including:

    Enhanced benefits package

    While health insurance is a valuable benefit, it can still leave gaps in coverage. FSAs strengthen your benefits package by providing employees with extra financial support for costs not fully covered by standard health insurance plans. Not only does this offer employees a practical way to manage their expenses, but it also helps your business remain competitive in attracting and keeping top talent. Adding FSAs to your benefits package shows your commitment to addressing the diverse needs of your workforce, fostering a greater sense of company loyalty.

    Cost savings

    FSAs can lead to significant cost savings for both employees and employers. Employees can reduce their taxable income by contributing pre-tax dollars to an FSA, resulting in lower taxes and higher take-home pay. Since employee contributions are deducted before taxes are applied, employers can also benefit by saving on payroll taxes. Additionally, FSAs are a cost-effective way to support employees’ medical and dependent care needs, which can help reduce your overall benefits costs.

    Flexibility in spending

    With FSAs, employees can direct pre-tax funds to a range of eligible expenses, including medical treatments, dependent care, and other essential costs. FSAs aren’t limited to just health and care costs; they can also cover creative uses such as travel-related items and various professional services. This flexibility allows employees to better manage their spending based on their own individual needs. By providing greater control over expenses, FSAs can make employees feel better supported in handling their financial responsibilities, increasing overall satisfaction and morale.

    How To Implement FSAs Into Your Business 

    Establishing FSAs in your benefits package calls for careful planning and structure to promote a smooth implementation. Consider the following to achieve an effective rollout and deliver meaningful support to your employees:

    Select an administrator and ensure compliance

    Begin by choosing a reputable professional employer organization (PEO) or third-party administrator (TPA) with expertise in FSA management. Your selected administrator will manage critical functions, including claims processing, account management, and adherence to Internal Revenue Service (IRS) regulations. This choice is essential to uphold legal standards and maximize the benefits of your FSA program.

    Establish guidelines and communication

    Work closely with your selected administrator to formulate clear guidelines and establish communication channels. This step clarifies roles and responsibilities during the transition, simplifying the implementation of the FSA program. Transparent communication will address concerns and questions promptly while also keeping everyone updated on the program’s features and benefits.

    Customize your FSA program

    To make the most of your FSA program, adapt it to fit the particular needs and goals of your business. Evaluate your employees’ demographics and preferences to decide which FSAs to offer. Depending on your assessment, you might consider including different types of FSAs, such as . Customization is key to making the program effective and relevant, encouraging employee engagement and satisfaction.

    Provide training and information

    Deliver thorough training to your HR team to ensure they are well-versed in the nuances and features of your FSA program. Next, hold informative sessions with employees to outline the advantages and practical use of FSAs. By offering detailed resources such as brochures and FAQs, you can further assist employees in optimizing their FSA benefits and enhance the program’s overall success.

    Measuring The Success Of Your FSA Program

    To determine how well your FSA program is performing, focus on key metrics that reflect its impact. Track employee satisfaction through surveys and feedback to see if the program meets their expectations and specific preferences. Check utilization rates to determine how frequently employees use their FSAs and if they are benefiting from it. Leveraging data and feedback to make informed adjustments will ensure the FSA program continues to align with your employees’ needs and reinforces its role in your retention strategy.

    Boost Your Benefits Management With A PEO

    Incorporating FSAs into your comprehensive benefits package offers you and your employees significant advantages, such as increased flexibility and potential cost savings, setting your business apart from competitors and demonstrating your commitment to your workforce.

    To streamline the management of FSAs and other benefits, partner with a professional employer organization (PEO) like GMS. A PEO provides expert guidance, handles administrative responsibilities, and ensures regulatory compliance. Additionally, employees with FSAs can visit our FSA Store to browse eligible products that can be purchased with their accounts. Contact us today to learn how our services can enhance your benefits program and promote retention.

  • Accidents and illnesses can occur without warning, despite our best efforts to avoid them. While health insurance covers many medical expenses, it may not cover everything, especially during extended recoveries. Supplemental insurance is an option for individuals seeking more peace of mind and assured support during a crisis. While employees can find this insurance on their own, adding them as options to your benefits package can benefit your business in the long term. It not only supports your employees but also enhances productivity and retention and reduces absenteeism.

    What Is Supplemental Insurance?

    Supplemental insurance is an additional type of insurance that provides coverage beyond a standard health insurance plan. Some of the main benefits for your employees are financial protection from out-of-pocket costs like deductibles and copayments, flexibility in choosing plans that fit individual needs, and peace of mind knowing there’s extra coverage for unexpected health issues or accidents.

    There are also benefits for you as an employer. Supplemental insurance enhances your benefits packages and helps attract and retain top talent. Today, 46% of professionals are considering quitting their roles. Of course, it takes more than monetary benefits to attract and retain top employees. For the best results, supplemental insurance should work in tandem with other nonmonetary initiatives.

    Enhancing Employee Financial Security

    While you may offer your employees the best health care, oftentimes, employees must cover themselves. Supplemental insurance for small businesses helps cover gaps in primary health insurance, providing financial support for medical expenses not covered by standard plans.

    In the event of a severe health condition, supplemental insurance, such as critical illness insurance, can offer lump-sum payments, providing financial aid for recovery and rehabilitation. Additionally, supplemental insurance ensures continued income for employees during long-term medical leave, bridging the divide between short-term and long-term disability benefits.

    This reduces financial stress during recovery periods, helping employees maintain economic stability while they focus on getting better. This support gives employees and their families peace of mind, knowing they have additional resources to cope with critical illnesses and accidents.

    Improving Organizational Productivity

    Many employers struggle with absenteeism. While you know your team best and the specific reasons that might be hindering full engagement, a common reason for absenteeism is financial stress. When employees face financial stress due to unexpected medical expenses, it can lead to increased absences as they struggle to manage their health and economic situations simultaneously. By providing supplemental insurance, you can minimize these financial stress-related absences.

    This support enables employees to access necessary medical care without worrying about the costs, leading to quicker recoveries and a faster return to work. As a result, employees can remain more present and productive, contributing to your organization’s overall efficiency and performance.

    Reducing absenteeism not only benefits individual employees but also helps maintain smooth operations and reduces the burden on other team members who might otherwise need to cover for absent colleagues.

    Additionally, offering supplemental insurance can:

    Enhance employee focus and performance

    Financial and health-related worries can be significant distractions for employees, impacting their ability to concentrate on tasks. Supplemental insurance alleviates these concerns by providing a safety net that covers additional medical expenses and supports income protection during illness or injury.

    Employees who are less preoccupied with personal financial issues can dedicate their energy and attention to their professional responsibilities, fostering a more productive and high-performing work environment.

    Strengthen employer-employee relationships

    Providing these benefits demonstrates your commitment to your workforce’s well-being and financial security. This commitment helps build trust and loyalty among employees, who feel valued and supported.

    Additionally, supplemental insurance encourages open communication and support within the workplace. Employees are more likely to express their needs and concerns when they know you’re invested in their overall health and well-being. This open communication fosters a positive and productive work environment where employees feel comfortable and motivated to perform at their best. By creating a supportive and inclusive workplace culture, you can cultivate long-term relationships with your team, boosting retention and establishing a cohesive workforce.

    Enhance corporate reputation

    Providing supplemental insurance also enhances the corporate reputation of your organization. Employees are looking for companies that prioritize the well-being of their team, and word travels fast. While there are many ways to improve your organizational culture, offering comprehensive benefits, including supplemental insurance, signals that your organization cares about your team. This positive perception can improve employer branding and enhance customer loyalty and stakeholder trust. Overall, investing in supplemental insurance not only benefits employees but also strengthens your business’ standing in the market and community.

    Types Of Supplemental Insurance

    There are many kinds of supplemental insurance to consider. Individuals will likely have different needs and can select the right options for them and their circumstances. Continue reading to learn about the types of supplemental insurance.

    • Accident insurance: Accident insurance provides benefits in case of accidental injuries. It covers medical treatments, hospital stays, and accident recovery costs, reducing the insured’s financial burden and helping them recover more comfortably.
    • Critical illness insurance: Critical illness insurance offers a lump-sum payment if an employee is diagnosed with a specified critical illness such as cancer, a heart attack, or stroke. The funds can be used for medical expenses, travel for treatment, or everyday living costs.
    • Disability insurance: Disability insurance replaces a portion of an employee’s income if they are unable to work due to injury or illness. This coverage ensures financial stability during recovery periods, helping employees manage their living expenses and maintain their standard of living while they are unable to work. Separate from short-term and long-term disability benefits, it helps offer continuous support throughout recovery.
    • Hospital indemnity insurance: Hospital indemnity insurance pays a fixed amount for each day an employee spends in the hospital. This coverage helps cover costs like deductibles, copayments, and other non-covered expenses that can accumulate during a hospital stay. By providing a daily benefit, hospital indemnity insurance alleviates the financial burden of hospitalization, allowing employees to focus on getting well.
    • Dental and vision insurance: Dental and vision insurance covers routine dental and vision care, which standard health plans may not fully cover. This includes benefits for exams, treatments, and corrective lenses.
    • Cancer insurance: Cancer insurance often provides a lump sum to cover expenses related to cancer treatment. In most cases, primary health insurance does not cover all associated costs, so cancer insurance can be an invaluable resource for some individuals.
    • Life insurance: This isn’t always considered supplemental; however, it provides financial protection for beneficiaries in the event of your death. Many options include term life, whole life, and universal.

    Supplemental Insurance With GMS

    Offer your team the best resources possible with GMS. Navigating supplemental insurance can be confusing. Juggling multiple vendors and price points when you have a business to run is not always possible, but you need to provide exceptional benefits to remain competitive. 

    Partnering with a professional employer organization (PEO) like GMS is one way to offer the best benefits without all the stress. Supplemental health insurance helps employees find health coverage that meets their specific needs, which is why GMS offers a variety of health coverage options. Contact us today to speak with one of our HR and Benefit experts.

  • Open enrollment can be a source of stress and confusion for many, with only a small percentage of people feeling confident in their ability to choose the right plan. If your employees are feeling anxious about this process, they are not alone. Let’s break down the essentials of open enrollment so your team can approach it with confidence. 

    What Is Open Enrollment? 

    Open enrollment is the designated time each year when employees can enroll in or make changes to their health insurance plans. Outside of this period, changes can only be made if you experience a qualifying life event (QLE), such as marriage, the birth of a child, or moving to a new location. These events allow for a special enrollment period, providing flexibility when significant life changes occur. 

    Choosing The Right Plan 

    Selecting the right health insurance plan involves evaluating your current and anticipated health care needs. Ask yourself if your current plan met your needs last year, whether your preferred doctors are within the network, and if your family circumstances have changed. Consider whether you expect to use more or fewer medical services in the coming year and whether you prioritize lower monthly costs or a broader network of providers. If you’re uncertain, seeking advice from a third-party resource, like a health advocate, can offer valuable insights. 

    Understanding Health Insurance Terms 

    Health insurance terminology can be complex, but understanding key terms is crucial for making informed decisions. Here are a few important concepts: 

    • Deductible: The amount you pay out-of-pocket before your insurance begins to cover expenses. 
    • Copay: A fixed fee you pay for specific health care services. 
    • Coinsurance: The percentage of costs you share with your insurer after meeting the deductible. 
    • Out-of-pocket maximum: The maximum amount you’ll pay in a year for covered services. 
    • Preferred provider organization (PPO): A type of health plan that offers a network of health care providers but allows for out-of-network care at a higher cost. 

    Can You Change Your Plan After Enrollment? 

    During the open enrollment period, you can make changes to your plan. However, once this period ends, changes are only possible if you experience a QLE. For new employees, benefits typically start on the first of the month following enrollment, while existing employees’ coverage begins according to the employer’s plan year. 

    Open Enrollment In 2024 

    Under the Affordable Care Act (ACA), employers with 50 or more full-time employees or the equivalent must provide health care to their team. Regardless of your team’s size, health care is a leading benefit that can assist with hiring and retention efforts due to the rising cost of personal health expenditures. While businesses have different renewal periods throughout the year, Q4 is a common time for many companies to conduct open enrollment. It’s important to stay informed with your company’s schedule to know when it’s time to elect benefits. For 2024, the open enrollment period for HealthCare.gov begins on November 1st and extends until January 15, 2025, in most states. This timeframe allows individuals to enroll in or make changes to their health insurance plans for the upcoming year. 

    Navigate Open Enrollment With GMS 

    It can be difficult for employees to make informed decisions regarding benefits due to the complex array of options available. When you partner with GMS, we shoulder the responsibilities of the open enrollment period, allowing you to concentrate on other aspects of your business. Your dedicated benefits account manager closely collaborates with you and your team to offer top-notch benefit plans and educate your employees effectively. Gain access to a team of specialists who can train your employees on plan details and address challenging coverage inquiries. We understand the complexities of health insurance. Let us guide you on how to maximize your plans, ensure compliance, and stay updated on regulations. Connect with us today. 

  • In today’s fast-paced business environment, many employers underestimate the importance of remaining compliant with employment laws and regulations. Underestimating the significance of compliance can have serious repercussions, including audits, lawsuits, and damage to your company’s reputation. 

    For human resources professionals, it’s imperative to stay on top of all the employment laws that your organization is subject to. Ignoring these regulations can hinder your ability to hire and retain talent. It’s crucial to recognize that compliance is not just a legal obligation but a foundation for a successful and sustainable business. Let’s explore some common compliance mistakes that you may be overlooking. 

    Classifying Employees Incorrectly 

    Misclassifying employees is a common mistake that can lead to costly penalties. The Department of Labor (DOL) provides specific guidelines for classifying employees as exempt or non-exempt. Exempt employees are not entitled to overtime pay, while non-exempt employees are. This classification depends on factors such as job duties, level of responsibility, and salary, not just job titles or work environments. Correct classification is crucial for accurate payroll processing, record keeping, and compliance with labor laws. 

    Mishandling Hiring Paperwork  

    Properly managing hiring paperwork is essential to avoid legal complications. Form I-9, which verifies an employee’s eligibility to work in the U.S., must be completed accurately and on time. Employers must ensure that all sections of the form are filled out correctly, including dates and signatures, and that valid supporting documents are provided. Common errors include missing information, incorrect documentation, or failure to update forms for employees with temporary work visas. Employers should provide clear instructions to new hires about acceptable documentation and ensure that all paperwork is completed on time. Failure to comply can result in hefty fines and legal issues. 

    Ignoring Safety Regulations 

    Compliance with safety regulations is critical to protecting employees and avoiding legal liabilities. The Occupational Safety and Health Administration (OSHA) requires all employers to provide a safe working environment free from recognized hazards. This includes providing necessary safety training, equipment, and protective gear, such as hard hats and eye protection. Employers must regularly communicate safety protocols and ensure that employees are aware of and adhere to them. Implementing a comprehensive safety training program can help employees understand potential hazards and the steps to take in case of an incident. 

    Failing To Stay Compliant During Growth 

    Rapid growth can lead to increased compliance challenges, especially as employee numbers rise. Businesses must be cautious when reclassifying employees or hiring independent contractors to avoid violating labor laws. Independent contractors must operate as separate entities, providing their own tools and setting their own hours. Misclassifying employees as contractors to circumvent benefits or tax obligations can lead to significant legal issues. As your business grows, regularly review compliance requirements to ensure all aspects of the law are being met. 

    Not Staying Up To Date 

    Staying updated with the changing landscape of employment laws is crucial for maintaining compliance. Regulations can vary significantly at the local, state, and federal levels, and new laws are frequently enacted. Business leaders must be aware of rules governing sick leave, employee privacy, hiring practices, workplace safety, and more. Failure to keep policies current can result in non-compliance and potential legal action. Regularly reviewing and updating company policies to reflect changes in the law can help mitigate risks and ensure your business remains compliant. 

    Stay Compliant With GMS

    GMS offers expert guidance to help businesses navigate the complex world of compliance. Whether it’s payroll, HR, or risk management, GMS provides the tools and support needed to ensure your business remains compliant with all relevant regulations. By partnering with GMS, you can focus on growing your business while we handle the intricacies of compliance. Contact us today and discover how we can support your compliance needs. 

  • New York businesses are bracing for significant health insurance premium increases in 2024. The New York State Department of Financial Services (DFS) has approved average rate hikes of 13.5% for individual plans and 7.4% for small group plans. While these increases are lower than insurers initially requested, they still represent a substantial burden for businesses and employees alike. 

    Three Factors Driving Premium Increases: 

    1. Rising medical costs: The cost of medical care, including hospital stays, physician services, and pharmaceuticals, continues to rise. This is compounded by increased utilization of these services as patients seek more care post-pandemic. 
    2. Economic inflation: Broader economic inflation has put additional upward pressure on health care costs, including administrative expenses for insurers. 
    3. End of public health emergency (PHE): The unwinding of the PHE has led to changes in coverage, such as the reintroduction of cost-sharing for COVID-19 testing and the commercialization of COVID-19 vaccines, which increase insurers’ costs. 

    What This Means For Business Owners: 

    Increased costs 

    Higher insurance premiums will impact New York businesses’ overall operating costs. This is particularly challenging for small businesses, which may struggle to absorb these increases. 

    Administrative challenges 

    The process of navigating these changes and ensuring compliance can be administratively burdensome. This includes managing renewals and understanding new coverage options for employees. Businesses may need to invest more time and resources into understanding the changes and communicating them effectively to their employees. 

    Employee impact 

    Rising premiums may lead to higher contributions from employees or reduced benefits, potentially affecting employee satisfaction and retention. Employees may also face increased out-of-pocket costs, which could affect their financial well-being and job satisfaction. 

    Strategic decisions 

    Business owners may need to revisit their benefits strategy. This could involve considering different insurance carriers or plans, exploring self-insurance options, or increasing the focus on preventative care and wellness programs to help control costs. 

    Navigating Changes In Health Insurance Premiums 

    As businesses face rising health insurance premiums, it’s crucial to explore various options to manage costs while still providing quality coverage for employees. Here are some strategies to consider: 

    1. Explore GMS’s master health plan:
    • GMS offers an in-house master health plan that helps businesses avoid large swings in usage trends and renewal rates. 
    • Our plan provides access to one of the largest national networks. 
    1. Leverage group buying power:
    • By partnering with GMS, small businesses can access the buying power of a large corporation. 
    • GMS represents more than 50,000 employees, allowing for more competitive rates. 
    1. Consider different plan options:
    • Evaluate various plan types, such as preferred provider organizations (PPOs), health maintenance organizations (HMOs), or high-deductible health plans paired with health savings accounts (HSAs). 
    • Each option has different cost structures and benefits that may better suit your business and employees. 
    1. Implement cost-sharing strategies:
    • Adjust deductibles, copayments, or coinsurance to balance costs between the employer and employees. 
    • Offer voluntary supplemental insurance plans to cover gaps in primary coverage. 
    1. Promote wellness programs:
    • Implement wellness initiatives to improve overall employee health and potentially reduce long-term health care costs. 
    1. Educate employees:
    • Provide comprehensive education on plan options and how to use the benefits effectively. 
    • Help employees understand how these changes might affect their contributions and benefits. Transparency can build trust and reduce anxiety. 
    • GMS offers a dedicated team of experts to assist with employee training and answering complex health plan questions. 
    1. Regular plan reviews:
    • Conduct annual reviews of your health insurance plans to ensure they still meet your business needs and budget. 

    By exploring these options, particularly GMS’s master health plan, businesses can work towards managing premium increases while still offering competitive benefits to their employees. 

    Navigate Change With GMS: 

    As New York businesses navigate these challenging premium increases, GMS offers a valuable solution. Our in-house master health plan helps businesses avoid large swings in usage trends and renewal rates. By leveraging the collective purchasing power of over 50,000 employees, GMS enables small businesses to access group health insurance at significantly lower rates—24% lower for employee premiums and 21% lower for family premiums compared to the U.S. average.  

    By working with GMS, you can navigate these challenges more effectively, ensuring that your business remains competitive and your employees are well supported. Partner with GMS to better manage your health care expenses, support your employees, and maintain a competitive benefits package that supports employee retention. 

  • Although regulatory compliance isn’t the easiest task, it is arguably one of the most important for small business owners. With limited time and resources, it can be easy for small business owners to overlook the importance of compliance. Failing to comply with legal requirements can have severe consequences for your business. This can lead to costly monetary penalties, legal liabilities, reputational damage, and more. There are many types of non-compliance, including, but not limited to, misuse of funds, unethical business practices, fraud, corruption, and bribery.  

    Understanding Regulatory Compliance 

    Regulatory compliance refers to an organization’s adherence to federal, state, and local laws, standards, and regulations. The specific regulations a company must follow depend on a business’s industry and location. Regulatory compliance is a broad topic and touches a wide range of areas, including data protection, ethics, financial reporting, and workplace safety. Maintaining compliance involves staying up-to-date on legislative changes, implementing proper protocols, and providing educational training opportunities for employees to ensure compliance.    

    Importance Of Compliance 

    Laws and regulations are enforced for many reasons, from ensuring workplace safety to protecting employee data and beyond; regulatory compliance can make or break a business’s reputation and bottom line. In fact, 87% of organizations indicated negative outcomes as a result of low compliance maturity. Continue reading to discover why business owners should make regulatory compliance a priority.: 

    Avoid monetary penalties 

    Failing to comply with laws and regulations can lead to costly monetary penalties. Fines can quickly add up, effectively lowering available funds to improve workplace efficiency and afford quality employee benefits. 

    Long-term financial impact 

    Non-compliance can often lead to expensive long-term costs that negatively impact your business. The cost of legal counsel, high insurance premiums, and consistent workers’ compensation claims can affect your company’s long-term appeal and revenue. In most cases, the best practice to lower these fees is to identify compliance problem areas and then work from the ground up to install a viable long-term solution. Solutions can range from conducting quarterly audits to managing important employee information through a (HRIS). 

    Legal liability 

    If your business is non-compliant, it can expose your company to legal risks and liability. In the event of a lawsuit or workers’ compensation claim, your company may be liable for violations, leading to expensive legal fees and reputational damage.  

    Reputational damage 

    When your customers or potential clients view your company as unsafe or untrustworthy, your bottom line will suffer. A lack of compliance can also negatively impact consumer confidence, market share, and growth opportunities.  

    Employee safety and morale 

    In most cases, a complaint workplace is a safe workplace. When businesses follow and enforce safety laws and procedures, not only are employees more cautious and protected, but they also feel safer. By working in an environment where they feel safe and valued by their employer, their morale and productivity may improve.  

    Educating employees on how and why they should focus on compliance is also essential. It can be beneficial to hold a seminar, attend a webinar, or conduct compliance training with your employees to ensure they understand what regulations to follow and why it’s crucial. 

    Indirect costs 

    While there are many direct costs to non-compliance, such as workers’ compensation claims and Internal Revenue Service (IRS) fines, there are also many indirect costs. After an incident occurs, employee turnover may increase. When employees don’t feel safe or feel like they are expendable, they are less likely to trust their employer and may depart from the company. High turnover also means you’ll have to focus on hiring and training new talent. Training new employees can take time and resources away from your dwindling workforce.  

    How GMS Can Help 

    Regulatory compliance can be an overwhelming and confusing topic. Keeping track of hundreds of laws can be exhausting, as the laws are constantly changing. While it may seem daunting, know that you’re not alone.  

    With a professional employer organization (PEO), like Group Management Services (GMS), you’ll have a dedicated partner to help ensure compliance with federal, state, and local laws. GMS can conduct compliance audits, help you stay current on legislation, and provide employee training. Simplify your compliance efforts with GMS! Contact us today to learn more.