All PEO pros will tell you that employee benefits in America are quite different than those nations with state-run health and pension plans. Most American health insurance plans are sponsored by the employer and are typically provided by private insurers. Similarly, most American retirement plans are privatized and defined benefit pension plans have generally been replaced by defined contribution plans like 401(k)s.
Employee benefit menus are typically defined by the company's industry, employee demand and labor contracts. White collar and technology companies offer a comprehensive benefit package while service industries, such as restaurants, typically offer fewer benefits.
In 2010, the Federal government enacted legislation that will further complicate employee benefits according to PEO professionals. The 2010 Patient Protection and Affordable Care Act will change the nature of employee benefits as it is implemented through 2018. All employers will be required to provide health insurance to their employees and the act requires all plans to meet certain mandates. Businesses that fail to provide benefits to their employees will face fines. However, numerous legal and political efforts seek to repeal or amend the Act and it is likely that the ultimate outcome will be much different than that envisioned in the original legislation.
Healthcare reform is already influencing health insurance as insurers adjust their underwriting standards. Renewal premiums in late 2010 and early 2011 are running significantly higher than in 2009 and in some cases the renewal rates have increased by more than 30%. Smart employers can cap these premium increases by revising plan designs, increasing employee incentives and engaging PEO pros to cap these premium increases.
If your company has expanded or is considering expanding in the U.S. market, discuss employee benefit needs with a PEO professional first to prepare yourself for the differences.
Read on to learn more about other HR considerations from the PEO pros at Pinnacle Business Solutions.