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  • Anthem, a large health insurance company, and Northside, an Atlanta hospital system, go head-to-head in a legal controversy in Georgia’s Supreme Court that could impact the state residents’ healthcare.

    In May 2021, Anthem decided to terminate Northside from its network due to the Atlanta hospital system billing overwhelming funds to Anthem. According to Insurance Newsnet, “One legal issue centers around the definition of “public health emergency.” That is because the General Assembly passed a law during the 2021 session prohibiting insurers from dropping health-care providers from their networks during and for 150 days after a “public health emergency.”

    A public health emergency, as declared by the city, the state, or the Federal Government, is an occurrence of a threatening illness or medical condition caused by an epidemic, pandemic, or an infectious agent. In the lawsuit, representatives of Anthem and Northside argue for different definitions for a public health emergency. Anthem argues for a “narrow” definition of a public health emergency meanwhile Northside argues for a “broad” definition of a public health emergency.

    What This Means For Georgia Residents

    It is possible that both parties may not be able to negotiate and reach an agreement, affecting Georgia Residents. With the extension of this case in the state Supreme Court, a decision will be made within the next six months. A public health emergency dispute that cannot be resolved affects state residents not only disrupts medical treatment but the collapse of healthcare facilities and systems, use of prescribed medications, and disrupts health surveillance and programs.

    How GMS Can Help

    Here at GMS, we have experts to assist with any healthcare inquiries you may have. Having an expert team by your side can be extremely beneficial for you and your employees. Let us assist in finding you the best healthcare plan, so you can focus on growing your business. Contact us today!

  • Considering the recent healthcare regulations, now is a better time than ever to consider a self-funded health plan. Self-funding your health insurance is a long-term strategy to save money, gain total control over your plan, and may offer immediate savings.

    It is a common misconception that self-funded health plans are only advantageous for large employers. In a traditional self-funded arrangement, small employers weren’t able to absorb the risk of becoming self-insured due to potential losses. By self-insuring your plan coupled with a stop loss policy (also known as a catastrophic policy), you mitigate your financial risk while allowing your plan to reap all benefits. Stop loss policies allow employers to evaluate potential savings and maximum exposure by becoming self-funded. Prior to stop loss insurance, the potential savings were estimated, and max exposure was unknown.

    Group Management Services offers stop loss insurance that allows small employers to be rated on their own medical applications while experiencing savings due to our economies of scale. This means we can offer lower stop loss premiums due to our volume, but your premiums aren’t affected by other plans should they not do as well as yours.

    Image of a business owner who switched to a self-funded health insurance plan.

    Various Benefits Of Self-Funding

    • Transparency. Self-insuring allows employers to view all costs paid by the plan.  These costs include fees for administration, broker, network access, and actual claims data. This knowledge allows employers to accurately evaluate their costs, and identify the areas they can potentially save more money.
    • Tax. Self-insured plans are not subject to premium taxes.
    • Use of capital. Rather than paying your monthly premium to a fully insured carrier, self-funding allows you to hold a good portion of this capital. Let’s say your plan has an annual premium of $250k with your fully insured carrier. By switching over to a self-funded plan, your total annual premium costs have now decreased to $60k with a max claim liability of $180k. This means you are now only paying $5k monthly in premium (instead of $20k with your current carrier), and funding claims up to a max total of $180k throughout the year. Since your max out-of-pocket by being self-funded is only $240k (premium plus claim liability), you’re already guaranteed to save $10k. The $180k in claim liability stays in your bank account, allowing employers to utilize this capital until needed to fund claims.
    • Pay only for actual claims; not the total expected claim level from a fully insured carrier. On a fully insured plan, you know you’re paying the total monthly premium regardless of claim experience. If your self-funded plan runs extremely well throughout the plan year, any amount left over in your claim liability is additional savings to the plan. If your plan only experiences $120k in claims, the $60k left over in the claim fund is additional savings for your plan. Does your fully insured carrier offer you a refund at the end of a good plan year? If they do, are they keeping a percentage of your savings?
    • Limit the surprises. Fully insured plans don’t typically notify the employer of high claims until the renewal period. By that point, you can anticipate a heavy increase due to claim experience. Self-insured plans allow for employers to be notified of plan expenses on a weekly basis throughout the year. This is extremely valuable for plans to know if an early renewal is beneficial and other options to assist the employer and the members.
    • Let us share the risk. By offering stop loss insurance on your plans, GMS has every incentive to properly monitor your claim volume and accuracy. We are responsible for reimbursing your plan for all claims paid over your maximum liability. Therefore, we work closely with employers and their members to keep costs in line.
    • Tailor the plan design. Self-funding allows employers to decide what plan options are most advantageous for their members without having to pay for unnecessary add-ons.

    Enjoy the Benefits of Self-Funding

    Self-insuring your health plan provides a copious amount of advantages, allows you to effectively evaluate costs, and offers substantial savings. The figures used in the example provided are from an actual proposal to one of our clients. Don’t take my word for it; the numbers speak for themselves. Contact us today to speak with our experts to learn more about a self-funded plan.

  • As the U.S. continues to experience rising inflation, there is immense pressure for business owners to increase employee wages. As of June 10th, the U.S. Department of Labor (DOL) reported the inflation rate reached 8.6 percent

    The Continued Workforce Shortage 

    The gap between job openings and available workers has continued to widen. The unemployment rate within the U.S. hit over 5.5 million in the month of April. This equates to two jobs per every unemployed worker. The continued pressure on wages has created an increase in the consumer price index (CPI). The CPI has risen to over 8.5% — biggest price 12-month increase since 1981. The labor shortage combined with inflation has become detrimental for businesses.

    The Rising Cost 

    Workers have begun taking advantage of the tight labor market. Despite the unemployment rate falling in recent months, the U.S. is still enduring a major gap. As inflation continues to rise, employee take-home pay holds less buying power. The recent surge in inflation leaves employees desiring more wages and benefits. As a result, employers are now offering increased compensation in hopes of attracting top talent, while remaining competitive. 

    According to SHRM, the average budgeted salary in 2022 climbed to 5.2 percent, compared to 4.5 percent last year. Many companies must adjust where budgets are typically set in advance. To keep key employees, some businesses are planning a midyear pay increase and salary adjustments – in addition to annual raises. While employers continue increasing salaries to retain their top talent, they must implement changes to attract new talent.

    Employee Benefits Options

    One way to remain competitive within the current market is to offer perks beyond salary adjustments. Companies are providing remote working options, providing gift cards to their employees for gas and groceries, and increasing bonus opportunities. Other organizations are offering additional perks such as student loan reimbursement, daycare options, or fertility benefits. These investments have a payoff as employees want to feel supported and appreciated.

    How GMS Can Help

    Due to rising inflation, it is vital for employers to remain competitive. When you partner with GMS, our HR experts can help you attract and retain top talent. Along with providing you top-of-the-line benefits, while ensuring the lowest rate. Our team supports your business through all unprecedented times and ensures your business has all the tools to remain competitive and successful. Contact us today to learn more.

  • The House and Senate passed the American Rescue Plan Act of 2021 in effort to temporarily expand eligibility to pay for health insurance through 2022. As a result of this act, Production Tax Credits (PTCs) were formed. According to Insurance NewsNet, “For Florida, the number of uninsured residents would grow by 24.8% according to the estimates in the study. It would also mean a five million dollar drop in total spending on health care for non-elderly residents in the Sunshine State.”

    Before the ARPA (American Rescue Plan Act of 2022), Congress implemented the Affordable Care Act of 2010 that initially started to allow PTCs to be available to states across the U.S. Florida residents make up 513,000 of the three million Americans at risk of losing healthcare coverage since speculation began that the Affordable Care Act wouldn’t be extended.

    Why Florida Residents Are Affected

    Florida falls into the category of a non-expansion state. A non-expansion state does not have to expand access to Medicaid or Medicare eligibility by the federal government. Other non-expansion states include Texas, Georgia, and North Carolina. If the extension doesn’t pass, residents in these states, specifically Florida residents below the federal poverty line (FPL), are more at risk of losing their healthcare coverage.

    According to FamiliesUSA, a healthcare advocacy organization, Florida resident premiums could go up 61% if the PTCs expire or health provisions are not extended. At this rate, health insurance rates would increase to $1.6 billion in 2023. 

    Partnership Benefits With A PEO

    As a business owner, we understand you want to offer your employees the best healthcare plan. By partnering with a PEO, we can offer a benefits plan sponsor that includes benefit coverages, a flexible spending account, a comprehensive 401(k) plan, and more. You will have access to a team of experts who will answer any questions you may have. Contact us today.

  • Medicaid is undergoing a major expansion in the state of North Carolina. The bill, H.B. 149, was passed on June 2nd by the North Carolina Senate. This bill will expand Medicaid eligibility, allowing more than 600,000 North Carolinians to receive the life-saving health care they need. In addition to the Medicaid increase throughout the state, the bill contains a certificate-of-need (CON) law that expands nurses’ practice authority.

    The Importance

    One of the major attributes of passing the bill comes from the continued rise of inflation within the U.S. Over the past year, North Carolina has been overwhelmed by the increasing healthcare costs. Senator Ralph Hise, R-Mitchell addressed, “Everything is going up. But with the sector of cost rising farther than anything else, and that has been true for decades, is healthcare; and it’s not even close.”

    Hise mentioned several other factors that support the need for Medicaid in North Carolina:

    • Eight years of solid Medicaid budgets
    • Republican leadership in the General Assembly
    • Reform of the system associated with the Medicaid transformation in 2021

    What It Means

    Over the past year, North Carolina has ranked third in the nation for hospital closures. The bill further pushes insurance companies to cover telehealth visits, along with providing medical billing transparency. Patients must be notified at least 72 hours before a procedure or visit if they have an out-of-network provider.

    The bill also contains the SAVE Act, allowing nurses to practice without a doctor present. Senator Lisa Barnes, R-Nash Stated, “It’s a measure that doctors’ groups have opposed but is targeted to rural areas where staffing shortages have reduced access to health care.”

    How GMS Can Help

    GMS supports your business by ensuring you stay ahead of all legislative changes. As a result of the expansion of Medicaid, there will be various changes throughout the healthcare industry. At GMS, a benefits specialist can find a healthcare plan that gives your employees access to what they need. Contact us today to get started!

  • It’s no secret that health insurance is one of the most important employee benefits. Insurance is also one of the most expensive benefits, forcing small business owners to balance an attractive benefits plan with the costs of offering different medical plans.

    While it can be easy to focus on group health insurance, it’s essential to remember another critical benefit – dental insurance. Let’s break down what types of dental plans employers can offer and how they can benefit your small business.

    What Dental Insurance Options Are Available For Small Businesses?

    There are various options for employer-sponsored dental coverage available for small businesses. These types of dental insurance plans include:

    • Preferred provider organizations (PPO) – Users can visit a network of providers for dental care. Individuals will have co-payments for procedures and can meet a deductible.
    • Dental health maintenance organizations (DHMO) – Users pay their dental network a set monthly fee for preventative care whether they use it or not. A set amount of annual services are covered within that fee, while others require copays or are not covered.
    • Discount or savings plans – Users pay a monthly premium to receive discounts on dental services, whether they are in network or not.

    How Much Does Small Business Dental Insurance Cost For Employers?

    It’s no secret that offering certain benefits is an ample expense for small business owners. Group health insurance alone can cost a business thousands of dollars per employee as premiums continue to rise. Fortunately, dental insurance is a much smaller investment than some other types of benefits.

    As with group health coverage, the exact cost of dental insurance will change for each employer. Dental insurance costs typically vary from $15 to $20 per employee per month depending on the plan of choice and whether an employee needs single or family coverage. Several factors will affect your overall dental premiums, such as your group size, the overall wellness of that group, and other criteria. Once you have your per-employee premium, you can extrapolate that monthly rate to determine your annual expected dental insurance costs.

    Four Reasons Why Small Businesses Should Offer Dental Insurance

    Employees aren’t the only people who benefit from dental coverage. Below are four key reasons why group dental insurance is advantageous for both employers and their workers.

    Recruitment and retention

    According to MetLife’s 2022 Employee Benefit Trends Study, 72% of employees named dental insurance as a must-have benefit. That placed dental insurance as the third-most desired benefit behind group health insurance and a 401(k) or some other form of retirement savings.

    While small business group dental insurance isn’t required by law, it has become a staple for competitive benefits packages across the U.S. That makes offering dental insurance an important, relatively cost-effective benefit that can help your business attract and retain talent.

    Overall employee health

    Dental coverage does more than just help your employees address their oral health. Regular dental visits also play an important role in helping employees stay healthy from head to toe. According to the Mayo Clinic, poor oral health has been linked to several chronic diseases and other serious health issues, including:

    • Diabetes
    • Heart disease
    • Endocarditis
    • Stroke
    • Pneumonia
    • Osteoporosis
    • Pregnancy and birth complications

    By giving your employees the opportunity to receive regular cleanings and other dental care, you can help them maintain their overall health. Healthier employees tend to not only be happier employees but also people who are less likely to use their group health plans for various other ailments.

    An employee covered by small business dental insurance at a routine cleaning.

    Employee productivity and availability

    Simply put, employees who have to take more sick days are likely to be less productive than workers who are in good health. Offering dental insurance is another way that employers can support the overall health of their company.

    Even if your employees are able to come in and work while dealing with tooth pain and other issues, poor health can make employees less effective. Aches, pains, and stress can cause employees to lose focus on the job. According to the Centers for Disease Control and Prevention, personal and family health problems cost U.S. employers $1,685 per employee per year in productivity losses.

    Long-term savings

    Investing in dental insurance for a small business can make a direct impact on your bottom line. To start, healthier employees are less likely to take time off because they’re sick or for additional doctor’s appointments. That added productivity alone can help you get the most out of your workforce.

    Preventative treatment allows you to get ahead of health issues in the long run. Reducing an employee’s chances of developing more severe conditions can save you from costly claims and productivity losses in the future. Research published in the National Library of Medicine suggests that health-related productivity costs are 2.3 times greater on average than medical and pharmacy costs alone. That number alone can make the added investment worth bolstering your benefits plan.

    Help Your Employees Stay Healthy And Productive

    A healthy workforce is happier and more productive workforce. Giving your employees supplemental plan options such as dental insurance is one way that you can strengthen your business. Of course, it’s not always easy to manage benefits administration and every other critical HR function on your own.

    As a Professional Employer Organization (PEO), GMS can leverage its collective buying power to help you offer quality health care benefits at better, more affordable rates. We also give your business access to proprietary technology and dedicated customer service to save you valuable time that you can focus on your business.

    Ready to offer dental coverage to your employees? Contact GMS today to learn how we can help you get the most out of your benefits package.

  • Retirement planning is the process of setting income goals, followed by the actions and decisions necessary to achieve those goals. This includes classifying sources of income, sizing up expenses, implementing a savings program, and managing assets and risk. Retirement planning is the financial strategy you take in saving, investing, and ultimately distributing money meant to sustain oneself during retirement. Planning prepares individuals for life after their income ends.

    Depending on where you are in your life, whether you’re a recent college graduate or five years into your career, your retirement plan will constantly change. If you’ve just entered the workforce, your main goal will be to save a certain percentage of your income. Once you reach the median portion of your career, you may want to consider increasing your specific income or target goals and take steps to achieve them.

    As a small business owner, you may have never thought about offering retirement plans to your employees. If nothing else, consider it as a recruiting tool – employees are concerned about their future and are looking for employers to provide peace of mind. The purpose of offering retirement benefits is to increase the economic security of your employees. Offering one has numerous benefits:

    • Attract and retain quality employees
    • Lower income taxes
    • Supersize retirement returns
    • Payroll deductions
    • Long-term compounding
    • Creditor protection
    • Pre-tax contributions
    • Employer contributions 
    • Roth contributions

    If you are wondering if you should begin offering this type of benefit to your employees, you first want to explore the different options available. Continue reading to see which option(s) might be the best fit for your business.

    Retirement Plan Options

    Traditional IRA

    A traditional IRA is available to anyone offering a wide range of plans and investment options. IRA stands for individual retirement account – meaning, they are tax-favored savings plans that are, for the most part, opened and managed by individuals themselves. Any individual who has taxable income can contribute to a traditional IRA.

    When making contributions to a traditional IRA, it reduces your taxable income while the money grows tax-free until you withdraw it. It is very similar to a 401(k) plan; however, the contribution limits are much lower in a traditional IRA. As of 2022, the contribution limits are $6,000 if you are under the age of 50 or $7,000 if you’re 50 or older. Individuals do not pay income taxes on their contributions, but instead, you pay taxes when you withdraw the money from your account at a specified time.  

    Roth IRA

    The main differentiator between a traditional IRA and a Roth IRA is when you receive the tax benefits. For a Roth IRA, you pay taxes on the money you contribute. This means that when you withdraw your money, you withdraw it tax-free at the time of retirement.

    To decide which plan to go with, the traditional or Roth IRA, experts have said to determine whether you expect to be taxed at a higher or lower rate when you retire. Many individuals create their retirement plans assuming that they’ll fall into a lower tax bracket once they retire. If you feel that you won’t be in a lower tax bracket when you retire, you could pay less income tax with a Roth IRA.

    When contributing to a Roth IRA, you are allowed to withdraw money after the age of 59 ½. However, there are several exceptions to the early withdrawal penalty. Should you purchase your first home, have an extensive amount of college expenses, or have a child, you might be able to withdraw from your Roth IRA with no penalty. With that being said, you are only able to contribute to a Roth IRA if your annual income is below a specific threshold.

    SEP IRA

    A SEP IRA stands for a simplified employee pension. This type of retirement plan is used mainly by self-employed individuals or small business owners. If you’re a business owner, this plan may be cheaper and easier to operate as opposed to a 401(k) plan.

    With a SEP IRA, you have the capability to put away a greater amount of savings each year. An employer can contribute up to 25% of each employee’s income, up to a maximum amount of $61,000, as of 2022. If you’re self-employed, you’re able to contribute up to 25% of your net income up to $61,000. With a SEP IRA, individuals are 100% vested in employer contributions. However, the immediate vesting of employee benefits may be a disadvantage for employers since the employee will take the money with them when they leave.

    Simple IRA

    A simple IRA is a retirement plan option for small businesses with 100 employees or less. Simple stands for savings incentive match plan for employees – meaning, employers must do one of two things:

    1. Match employee contributions up to 3% of the employee’s salary
    2. Contribute 2% of an employee’s salary regardless of any contribution from the employee

    Simple IRA plans offer a substantial source of income at the time of retirement by allowing employers and their employees to set aside money within retirement accounts. The main differentiator between conventional retirement plans is that with a simple IRA, there are no start-up and operating costs.

    With this type of retirement plan, employees are always fully vested which means no matter when the employee leaves the company, they can keep all the employer’s contributions. In 2022, employees can contribute a maximum amount of $14,000 of their annual salary or if they’re over the age of 50, they can contribute up to $17,000.

    401(k)

    The most popular option for a retirement plan is a 401(k). According to the Internal Revenue Service (IRS), a 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts. The plan can be a profit-sharing, stock bonus, pre-ERISA money purchase pension, or a rural cooperative plan.

    An employee who signs up for a 401(k) agrees to have a portion of each paycheck paid directly into an investment account. Some employers may decide to match part or even all the employee’s contributions. There are two basic types of 401(k) plans – Traditional and Roth.

    The money in your 401(k) grows tax-free until you withdraw it. Once you choose to withdraw it, you’ll pay income tax on the money you take out. However, you must be 59 ½ or older to withdraw your money from the 401(k) plan without a penalty. You are also required to start withdrawing money from your plan at the age of 72.

    Most employers tend to offer 401(k) plans because they have fairly high contribution limits. In 2022, you can contribute up to $20,500 or $27,000 if you’re over the age of 50.

    Tom Smith, Director of Retirement Services at GMS, stated, “For employees, a 401(k) holds numerous benefits. Contributions are deducted directly out of their paycheck versus the employee having to send money to an account themselves. If their employer matches contributions, then it becomes a no-brainer for the employee to participate because they leave free money on the table if they do not.”

    Solo 401(k)

    A Solo 401(k) assists in maximizing retirement savings for individuals who are self-employed and business owners that don’t have employees. These plans are also known as individual or one-participant 401(k) plans. A Solo 401(k) is very similar to a standard 401(k) plan, except for the ability to boost your savings by contributing as both the employer and employee. 

    Individuals can contribute up to 100% of self-employment income with a maximum amount of $20,500 or $27,000 if you’re over the age of 50. In addition, you can act as the employer since you’re self-insured and contribute up to 25% of your business’ income. This may be the best option for those who are self-insured as you may be able to contribute more with this dual contribution formula.

    Partner With GMS Today

    No matter which retirement plan you choose, they all provide tax advantages as incentives to save for retirement. Now, you may still have a handful of questions and are still hesitant if you should offer a retirement plan to your employees. GMS is here to help. A PEO like GMS can leverage group buying power to reduce plan costs for small businesses and take on the fiduciary burden to ensure you remain compliant. As a business owner, you can stop wasting time trying to make sense of your legal responsibilities when you partner with GMS. With GMS, you easily establish: 

    • 401(k) eligibility requirements 
    • Vesting schedules
    • Tax-deductible matching
    • Profit-sharing contributions

    For more information about offering retirement plans to your employees, contact our experts today.

  • Prior to the pandemic in 2020, research showed that one in five adults struggled with mental health issues. Post pandemic has triggered a 25% increase in anxiety and depression, according to the World Health Organization (WHO). With this drastic increase in the past couple of years, employers need a plan of action to increase the health and wellbeing of their employees.

    With employees returning to the workplace, it can be stressful and overwhelming. Individuals are still adjusting to the “new normal” and need support and resources. With all the changes in the work environment, many individuals have started prioritizing mental health within the workplace.

    A survey conducted by the Employee Benefit Research Institute (EBRI) showed that in response to the pandemic, 50% of employees believe mental health wellness programs are more important than ever. Unfortunately, cost continues to be a concern for many individuals. The survey also found that three in four people trust their employer to offer quality benefits and offerings that will improve their overall well-being.

    The following will help to create a safe work environment and ensure the welfare of all employees:

    Promote Health And Well-being

    Employee wellbeing refers to the state of employees’ physical and mental health and focuses mainly on factors including mood and perception. The leadership of your organization needs to create a healthy culture and supportive environment for their employees. Educating leaders on how to recognize the signs of stress and mental health issues will help reduce turnover and absenteeism. Poor mental and physical health ultimately leads to lower moods, poor concentration, difficulty making decisions, and inadequate performance. Ideas that you can utilize to promote employee well-being in the workplace include the following:

    • Ensure recognition is a part of your company culture
    • Practice mindfulness
    • Create impactful mentoring programs
    • Promote mental health awareness

    Workspace/Work Flexibility 

    Your work environment can affect your mental wellness. On average, individuals spend 90,000 hours at work which is nearly one-third of our lives. How work affects us is directly related to our physical environment. Since the beginning of the pandemic, hybrid work became a new concept where employees worked from home two to three days per week and physically entered the office the remaining one to two days. Allowing flexibility like this in your business allows your employees to have a wider range of freedom. If the employees have children, they have adequate time to drop them off at school or take care of loved ones. A study found that 72% of employees report that work-life balance is especially important when considering a new position.

    When individuals think of office work, they probably think of people sitting at a desk all day. Sitting at a desk for an extensive period of time takes a toll on your body and mind. It goes hand in hand with the risk of anxiety and depression. Research is still being conducted to determine the reasoning behind it, but it’s most likely related to lack of exercise. Once an hour, individuals should get up from their desks to take a break physically and move around, stretch, get some water, clear your head, etc.  

    Communicate

    Communication is a valuable tool in managing many aspects of mental health and the well-being of your employees. As there are a handful of ways to communicate with team members, it’s important to determine the most effective way your team communicates. Understanding your team member’s communication styles is important to succeed. If they prefer face-to-face conversations over email or video, meet with them in person. Effective communication between your leaders and your employees strengthens relationships and ensures everyone is on the same page. This will create a positive working environment and improves motivation and productivity. Remember to always check in with your colleagues. Encourage a happy and motivating workplace. 

    What Is Your Company Doing To Address The Well-being Of Your Employees?

    Your employees’ career is a vital part of their life. Increased mental well-being is connected to happier work, more effective collaboration, and increased productivity. When partnering with GMS, we offer a wide range of benefits to your employees. Through our employee assistance program (EAP), our clients have access to free confidential services including legal and financial consultation, childcare, special needs, counseling, and more. If you choose to utilize free counseling, you have up to four sessions, per problem for face-to-face counseling with 24/7 access. To learn more about our benefits offerings, click here. 

  • As a benefit that many companies offer to their employees, paid time off (PTO) policies constantly evolve to accommodate changes in the working world. However, many employers fall into the trap of overly complicated policies that are not only difficult for employees to understand, but also difficult to track.

    It’s important to find a policy that will make employees happy and maintain effective workplace attendance within the workforce. The good news is that implementing a good PTO policy doesn’t have to be complicated. Here’s what you need to know in order to build the right PTO policy for both you and your employees.

    How Does PTO Work?

    PTO can work in different ways depending on your exact policy. Each option boils down to giving every eligible employee an allotment of time that they can use to take off work for various reasons.

    The exact way that those paid days off are granted depends on the type of policy. Common PTO policy examples include:

    • Traditional leave
    • PTO banks
    • Unlimited PTO
    • PTO donation

    Traditional leave

    A traditional PTO policy gives employees a set number of days for different types of time off, such as vacation time, personal days, sick days, and holidays. These days can be used over the course of a year and renewed once the employee hits a certain date. New employees typically start with a set number of days and can earn more after being with the company for a certain number of years.

    PTO banks

    PTO bank policies revolve around giving employees access to a pool of paid time off that they can use for any reason. As with traditional plans, employees can use these days over the course of the year until they run out or when their pool renews at a certain date. This type of plan gives employees more flexibility when it comes to needing days off

    Unlimited PTO

    Unlimited PTO plans allow employees to take as many days off as they need, as long as the manager approves them. This option is less common than other PTO policies, but has grown steadily in popularity because of its flexibility and freedom. However, these plans can also require a well-written policy to avoid both overuse and underuse.

    PTO donation

    PTO donation is less of an overall plan and more of an add-on to other policies with set allotments of paid leave. Organizations that allow for PTO donation give employees the ability to give some of their days to a coworker if they need them, such as if an individual needs extra time to take care of a loved one. This option keeps the organization’s overall pool of paid leave the same but gives employees some added flexibility.

    What Are The Benefits Of A PTO Policy?

    While the U.S. does not federally mandate paid vacation or holiday time, there are plenty of good reasons to provide this form of benefit. PTO is regularly among the most desired benefits for job seekers, which is a big reason why roughly 80% of private businesses offer some form of PTO. In turn, these businesses enjoy the following advantages:

    • Reduced absenteeism – According to SHRM, more than half of employers who combined sick time and vacation time in the same PTO plan reduced absenteeism by up to 10%.
    • Employee performance – Burnout is a real problem. Giving employees the ability to take meaningful vacations and mental health days helps them stay more productive in the long run.
    • Employee morale and trust – A PTO policy is a way to show employees that you care about their personal lives and let them use their time as they see fit. In return, those employees are more likely to be happy at work and stay with the company.

    What Factors Impact Which PTO Policy Is Best For My Business?

    There are several variables that your business needs to address when it comes to providing PTO. This process involves asking a few key questions that will play a major role in how you’ll shape your PTO policy.

    How many days off should employees have?

    The right amount of time off can vary greatly depending on a business and its employees. According to Indeed, the average amount of paid vacation days can range from 11 to 20 depending on an employee’s service length.

    The best place to start is to review your business’ internal staffing needs to identify a comfortable range of days that accommodate workloads and employee satisfaction. You can also check industry and regional averages to stay competitive with the competition.

    Does it matter how employees use their time off?

    The answer to this question will likely dictate whether you opt for a traditional policy or something more flexible. If it’s important to separate vacation days from sick leave and other time off, a traditional PTO policy is a natural choice.

    Should employees accrue PTO over time or receive a lump sum?

    The exact timing of how and when employees receive their allotment of time off can vary. Some businesses keep this process simple by giving employees access to their entire pool of PTO days on their anniversary date or at the beginning of the calendar or fiscal year. Other businesses may opt for a slower accrual system where employees earn time off by pay period, month, or a set number of hours. Each method is valid, so it depends on how your organization prefers to dole out and track this time.

    Can employees roll over unused time?

    It’s important to address what will happen to any unused PTO time. Studies show that Americans only end up using 54% of their eligible vacation time. Some companies try to encourage PTO usage through a “use it or lose it” policy, while others allow workers to roll some or all their remaining time over.

    How do I track PTO?

    While businesses in the past relied on manual documentation for PTO tracking, employers can rely on technology to ease this burden. Software like a human resources information system (HRIS) can streamline the management and tracking of personal time, accruals, limits, payouts, and other details. Businesses can try and utilize software in house or work with a Professional Employer Organization (PEO) or another HR partner to handle these keys responsibilities.

    Do local and state regulations impact my policy?

    While employers play a major role in shaping their company’s PTO policy, it’s also essential to keep compliance in mind. Certain states and regions have laws in place that direct your policies. For example, some states may require businesses to roll time over or compensate employees for unused payout if they leave the company. These laws vary greatly, so make sure you review local and federal laws when it’s time to draft or update a policy.

    PTO Policy Best Practices

    No matter how you shape your PTO policy, it’s important to take some measures to maximize their effectiveness.

    Clearly outline your PTO policy in your company handbook

    Your employee handbook is an essential compliance tool, so it’s only natural to use it to document your PTO policy. Make sure to outline the following details to give employees a clear understanding of how they can follow your policy:

    • Who is eligible for PTO (full-time employees, part-time employees, etc.)
    • How much time off they receive and how it’s accrued
    • Paid and unpaid leave options
    • The differences between vacation time, sick time, and more (if necessary)
    • The process for requesting time off (and how it’s reviewed)
    • Instances where time off requests may be denied
    • Payout practices
    • Consequences for violation

    Set some limits on usage to protect your business

    While it’s natural for employees to take time off when they want to, there are some scenarios that can pose problems for employers. Consider implementing the following measures to avoid internal issues caused by short notice, unfortunate timing, and more.

    • Place a cap on the number of days that employees may request during a vacation leave.
    • Regulate the number of employees from within a department that may be out at any given time.
    • Mandate how much notice employees must provide prior to taking vacation.
    • Create a waiting period for new employees before they can start using or accruing PTO.

    Openly encourage employees to take time off

    While being a hard worker is a great quality, there’s only so much that most employees can go through without a break. Studies have shown that taking time off from work not only improves employee performance and productivity, but also reduces stress and the risk for heart issues.

    Having a PTO policy is one step, actively encouraging employees to use it is another. It’s critical to make employees comfortable with taking time off to maximize the benefits of your policy. SHRM recommends using the following strategies:

    • Give employees verbal or written permission to take time off, even if they’re worried about who will pick up the slack.
    • Encourage employees to take off half days or shorter breaks if they don’t want to utilize a full day or other extended periods.
    • Make time off a topic of conversation during employee reviews or other conversations.
    • Lead by example and make it known when managers are taking time off and that it’s encouraged that all employees do so as well.

    Simplify Your PTO Process

    While PTO has several benefits, it is yet another process to add to an ongoing list of administrative responsibilities. Fortunately, employers have options to simplify PTO and strengthen their business.

    GMS partners with businesses to support their employees while saving employer’s valuable time. We provide our clients with resources like GMS Connect to help them track time off, automate accruals, and streamline the approval process. In addition, our HR account managers can help you design a policy tailored to your company’s needs.

    Taking time off shouldn’t take a lot of work. Contact GMS today to talk to one of our experts about how we can enhance your employees’ experience and increase your operational efficiencies.

  • Do you enjoy the benefits of partnering with a PEO, but you aren’t sure you’re getting everything you were promised in the beginning? If you currently partner with a PEO, you know there are a wide array of benefits you gain through the partnership. When you partner with GMS, you will receive access to our experts in the fields of payroll, employee benefits, human resources, and risk management.

    Making the switch to a different PEO may seem mundane, but it’s important to ensure the partnership with a new PEO is the right fit. Continue reading to learn how simple it can be to switch from one PEO to another.

    Step 1 – Define Your Reasons For Switching PEOs

    The most important step in switching from one PEO to another is determining the reason why you want to switch. Make a list of pros and cons of your current PEO. The types of services and support you want not only have a direct effect on which PEO is right for you but also impact the transition process. 

    Consider asking yourself the following questions to fully understand your reason(s) for switching.

    • Are you receiving everything you were promised at the beginning of your partnership?
    • What services is your current PEO offering you? 
    • What services do you feel are lacking (if applicable)?
    • How fast do they respond to your correspondence and through what channels are they accessible – email only, phone, fax, and so forth. 
    • What red flags, if any, have you experienced that need to be addressed?
    • How often does your HR account manager facilitate onsite visits?
    • Do your employees have easy access to their payroll information?
    • How flexible is your medical plan for your employees?
    • Are your claims being handled properly and in a timely manner?
    • How often do you review your workers’ compensation rate?

    Step 2 – Find The Right Fit

    If you’re considering switching PEOs, you may ask yourself how beneficial it will be for your business to continue a partnership with a PEO. When determining the right PEO for your business, consider your ever-changing business needs. What are your current challenges? Do you anticipate any changes to your business that could impact which services you need? 

    Not all PEOs are created equal. Some are brand new to the PEO market, while others have been around for quite some time. With that said, every PEO offers different services, and some may be a better fit than others. Do your research and ask questions to grasp a better understanding of each business.

    Step 3 – Cost And Value

    PEOs are dedicated to helping businesses grow, so we understand the commitment involved in a partnership. However, having already worked with a PEO, you understand the value a PEO can offer your business. Most PEOs have an enrollment fee that can run up to a couple of thousand dollars for your company. Consider looking for a PEO that is transparent about pricing. You will most likely have a first meeting with each PEO you are interested in. If they aren’t upfront and honest and can’t give an explanation behind the pricing, that’s a red flag right away. Your costs of doing business may be increased unintentionally due to ineffective HR processes. Decreased productivity, high employee turnover, less impressive employee benefits, and more, are ways your ineffective HR practice could be hurting your bottom line. 

    Step 4 – Partnership Overview

    Since you’ve gathered information about top PEOs you are interested in partnering with, it should be clear which organization you want to work with. It’s important to consider the conversation that will be had with your current PEO about parting ways and switching to another PEO. Your previous PEO may require a written notice of termination – a 30-day notice is typical. Create a plan with your team members to ensure a smooth process for the transition of services.

    Your new PEO will provide you with a documented plan of what the partnership will look like. They will show you how the transition and onboarding process will look and how they will get your employees settled in with the new PEO.

    Step 5 – Onboarding

    While PEOs save companies time in the long run, the process of onboarding with a PEO can be time-consuming in the beginning. You must get through the growing pains first before taking advantage of the amazing benefits. There will be multiple steps in the onboarding process consisting of a pre-launch meeting, HR and benefit meetings, and a conversation about payroll. Depending on the PEO you decide on, you should have the option to sign physical documents or submit them electronically if the company is paperless. Once the documents are completed and filed, the implementation process will begin. At the end of the onboarding process, you will have a faster, smarter, and more efficient HR administration process. 

    Find The Right PEO To Help Your Business

    Finding the right PEO to assist with your administrative functions is vital to the success of your business. Managing the many HR functions is the backbone of your business. Researching a variety of different PEOs and choosing the right one can be time-consuming, but in the long run, will provide you with more free time so you can focus on growing your business. A PEO provides you with the administrative support you deserve.

    At GMS, our team of experts works diligently with you and your employees to make your business simpler, safer, and stronger. To learn more about how GMS can benefit your business, contact us today.