Thinking about offering health benefits to your part-time staff?
It’s one of the toughest questions your growing business will face. How much should you pay your employees? It’s a simple question. But there is no simple answer. You want to pay enough to entice talented people to join your company and stay. But on the other hand, health insurance is expensive. Really expensive.
The average cost of an employer family plan is $26,993 a year. That’s adjusted annually and it keeps going up.
So is it worth it?
The short answer is yes, but only if you do it the smart way.
Why Part-Time Benefits Are A Tough Call?
Few employers provide health insurance to their part-time employees. Statistics confirm this.
Only 25% of part-time workers have health care benefits from their employer. That’s in stark contrast to full-time workers, where nearly 9 in 10 have access.
That’s a massive gap.
Why does it even exist? Here’s the reason. Under Obamacare, big businesses only have to offer coverage to employees who work 30+ hours under the ACA. Part time employees are exempt and therefore most companies just ignore them.
But here’s the thing…
You don’t HAVE to do this, but just because you don’t HAVE to doesn’t mean you shouldn’t. The question isn’t “should you?” It’s “how are you going to pay for it?”
Reducing Employer Healthcare Costs Without Cutting Corners
Cutting employer health care costs that’s where the REAL money is. You are not required to offer your part-time employees the expensive plan that your full-time employees receive. There are many creative ways to provide coverage for individuals and keep your expenses manageable by enrolling in a managed care type plan. These types of plans are designed with reducing claims costs and premiums in mind. Visit https://managedhealth.com/ to see how a managed care strategy can save a growing company money and still provide employees tangible coverage.
Why does this matter so much right now?
The reason? Costs aren’t coming down. Family premiums increased 6% in a single year and are expected to skyrocket in the future.
So you need a plan. Not just a policy.
The Hidden Cost Of Saying “No”
Skipping benefits for part-time staff saves money upfront, and that part is obvious.
What isn’t obvious is the cost you don’t see on your balance sheet.
When part-time workers don’t get any benefits, they tend to:
- Leave faster for jobs that do offer them
- Come into work sick (because they can’t afford a doctor)
- Feel less loyal to your business
And every time someone leaves through that door… you pay for it. You have to post the job, interview, hire, train and onboard someone new. When your team is small, that adds up quickly.
Benefits are one of the primary reasons employees stay. From one of the largest surveys of US workers, 54% of employees stayed with their current employer because of benefits.
Think about that for a second.
Benefits are the reason over 50% of workers remain at their jobs. So it’s one of the biggest retention tools available that few expanding companies utilize.
4 Smart Benefit Options For Part-Time Staff
Here’s the good news: you have options, and lots of them.
Go through them one at a time, choose one that you can afford and that suits your team and take action. Seriously, it’s that easy.
Minimum Essential Coverage (MEC) Plans
MEC plans cover the basics, like preventive care, regular checkups, vaccines and health screenings.
Low-cost is just one reason why they’re a good option for small businesses just starting out that want to offer something.
Individual Coverage HRA (ICHRA)
This one is a favourite for growing businesses.
An ICHRA provides each employee with a fixed amount of money each month to purchase their own health insurance policy. You can provide a different amount for employees that are considered part-time versus full-time.
Why is that helpful? Because you know what you’ll pay every month, so there are no surprises and no huge premium increases when it’s time to renew.
Telehealth Plans
Telehealth plans allow your employees access to a physician anytime via phone or video. Monthly fees are minimal, and part-time employees appreciate the convenience.
No waiting rooms. No time off. Fast, easy care when they need it.
Voluntary Benefits
Voluntary benefits can be dental, vision and accident insurance. Your employees fund these, but they receive them at lower group rates through your company.
It’s very inexpensive for you (sometimes free) yet your employees view it as a genuine perk.
That’s a win-win.
Will Your Part-Timers Actually Use It?
Here’s something most business owners don’t realise.
If people are offered benefits, they do not automatically enroll. Of eligible part-time workers, only 44% actually sign up.
Is that a bad thing? Not at all.
Many part-timers are already covered under a spouse, parent or another employer. So you only pay for the ones who will use it. And that’s good news for your budget!
Survey your employees before choosing a plan. It only takes 10 minutes and you’ll avoid subsidizing unwanted benefits.
Should Your Growing Business Do It?
OK, so now let’s recap. Providing health benefits to your part-time employees makes sense if:
- Your business relies on part-time workers to run day to day
- Staff turnover is costing you time and money
- You’re competing with bigger companies for the same workers
- You can handle a small, fixed monthly cost per worker
If two or more of those sound like you, the answer is likely yes.
However, don’t take on every suggestion on day one. Select one of the above options, try it for 6 months and monitor the effects it has on your turnover before making changes.
Keep it simple. That’s how growing businesses win.
The Final Word
Employee health benefits for part-time workers were once considered “nice to have.” Now they’re considered a smart business decision — if done wisely.
To quickly recap:
- Most part-time workers don’t get benefits, so offering them helps you stand out
- Benefits are one of the top reasons people stay with an employer
- If premiums keep climbing, your strategy needs to include lowering employers’ health costs
- Low-cost options like MEC plans, ICHRAs, telehealth and voluntary benefits make it affordable
- Many part timers will not enroll so your actual cost is less than you expect
Companies that win the war for talent don’t necessarily pay the most. They take care of their people, intelligently.
