Hi folks Dave Waring here again with fit small business comm and today's lesson
of the day in our last video we continued our series on how to hire and
manage with a look at how to design an employee compensation plan as we
discussed in that video we believe you should develop a total compensation
philosophy for your business that includes a dollar amount of pay
opportunities for professional development and benefits in this video
we will help you understand what's involved with offering the two primary
types of benefits health insurance and retirement benefits so let's get started
health insurance health insurance is the most important but also the most
expensive benefit that you can offer your employees while health insurance
benefits are not currently mandatory they can help you attract and keep to
top quality talent you can purchase group health insurance directly from a
wide range of insurance providers or you can shop through the new health care
marketplaces created by the Affordable Care Act which is also known as
Obamacare offering health care through the shop exchanges may also qualify your
business for a number of tax breaks take a look at our ultimate guide to
Obamacare which I've included a link to in the resources link below this video
for more information on opportunities that the Affordable Care Act offers your
business what will health insurance costs businesses generally spend between
7.5 and fifteen percent of payroll costs on health insurance for their employees
where can you get health insurance if you decided to purchase a group plan
directly from an insurance provider you can usually get a direct quote through
their website or an insurance broker some of the top providers are united
healthcare Aetna and Cigna I've included some additional links in the resources
link below this video for help with choosing and setting up a health care
plan for your company retirement benefits retirement benefits are broken
down into two categories defined contribution plans which includes 401ks
and iras and defined benefit plans which are mostly pensions most small
businesses that offer retirement benefits choose defined contribution
plans and we recommend doing the same defined contribution plans like a 401k
encourage employees to set aside their own fun
for retirement each pay period in some cases companies match a certain
percentage of what employees contribute employees can invest their money in
different mutual funds to avoid having their savings decline in real value the
cost of offering a defined contribution plan will depend on the size of your
company and if you decide to match a percentage of your employees
contributions how much they end up saving for many small businesses the
simple iras and simple 401ks are a good option these only require two page IRS
forms and costs three hundred and fifty dollars plus twenty five dollars per
participant they both allow total combined contributions which is employee
contribution plus employer matching of up to eleven thousand five hundred
dollars per year you can also set up a full 401k but this is more expensive and
complicated a full 401k is only a good idea once your payroll reaches about
500,000 where the combined contributions reach at least 20,000 and salary
deferrals and company matching where can you get a defined contribution plan
setting up the right defined contribution plan can be a complicated
fair and we recommend seeking professional help before doing so
however familiarize yourself with the different types of plans available for
small businesses and the features and benefits of each using the links that
I've included in the resources link below this video some of the largest
administrators of retirement plans are fidelity Vanguard and ADP in addition to
retirement and health care benefits you may also want to consider offering some
specialty benefits such as life insurance disability insurance dental
and vision coverage tuition assistance and paid time off you can learn more
about these options in our ultimate guide to benefits packages which I've
included a link to in the resources link below this video that's our video for
today if you have any questions or comments please feel free to leave them
in the comments section below for more great advice on how to start and run a
successful small business also be sure to visit us at fitsmallbusiness.com
today thanks for watching