Companies that don’t select top-tier benefits packages are likely to lose employees regularly. For many workers in the U.S., the advantages of job-hopping tend to outweigh company loyalty. While employees can only expect a raise that amounts to about 1% of extra spending power, it often pays 10-20% more to switch jobs. If benefits are poor, that motivates workers to leave as soon as they can.
However, 78% of employees are more likely to stay with their current employer because of the benefits they offer. If you want to stay competitive in 2023 and beyond, you need a benefits package with the most current features available. Here are a few you should know about:
Flexible Spending Accounts:
In addition to traditional benefits packages, flexible spending accounts are add-on benefits that allow employees to contribute extra income from their paychecks. This amount can be used to cover out-of-pocket costs like co-payments and deductibles. There is no tax on FSA accounts, and unused money can potentially roll over to the following year (conversely, an employer can choose to extend the time limit).
By enrolling in an FSA, an individual sets aside a portion of their salary that is not subject to payroll taxes. For those in higher tax brackets, this is an excellent way to save money. FSAs are also ideal for those who spend large amounts on healthcare. Deductibles and co-pays add up, and some prefer to use the money set aside in FSAs rather than dip into their savings.
Dependent Care:
Dependent care FSAs are much like standard FSAs, but they are specifically tied to dependent care services. This includes daycare, after-school programs, babysitter costs, and any adult care for spouses or relatives that cannot care for themselves. Like other FSAs, dependent care is tax-free, which helps families save money. You can also claim child and dependent care tax credits during tax season with dependent care FSAs. The result is a significant reduction in your taxable income, sometimes up to thousands of dollars in savings.
2023 Commuter Benefits:
Commuter benefits also allow employees to set aside tax-free money, this time for the sake of commuting costs. As of October 2022, workers can spend up to $300 dollars per month to cover the cost of things like subway cards, parking, and rideshare trips. Employers in many metropolitan areas are required to offer commuter benefits. In today’s day and age, this addition to your benefits package is essential for employees that work in person. Getting from Point A to Point B isn’t inexpensive, and having tax-free money set aside for this purpose is a major advantage.
So, how does this work? Once someone is enrolled in commuter benefits, the cost of their monthly commute is deducted from their pay. This money is then placed on a voucher or debit card for employee use. Any unused dollars are rolled over each month so long as employees stay with their current job.
A Brief History of Add-On Benefits:
The IRS established FSAs in the 1970s after inflation caused the cost of employer-sponsored healthcare to increase. Initially, deductibles and co-insurance were introduced, followed shortly by the exclusion of dental and vision care. This placed more responsibility on the employee to pay for their healthcare costs. FSAs, dependent care, and commuter benefits are designed to mitigate the costs of care in a high-cost society.
Why Employers Should Offer These Features:
Besides attracting and retaining talent, employers should consider adding to their benefits package for these reasons:
- Save money on payroll taxes and other costs such as worker’s compensation and unemployment insurance
- Employees who can afford care tend to use it preventatively, which means they use fewer sick days and are more productive at work
- Employers have the option to work with a group of specialists to help them get the most out of their FSA offerings
Collaborate with TriBridge Partners to Enhance Your Benefits Package
Are you looking to stay competitive by offering a top-notch benefits package? TriBridge Partners is ready to help! To discover how our experts can assist your organization or business, please call our office today at 240-422-8799, email Jessica Storck at Jessica.storck@tribridgepartners.com, or find us on Linkedin.
