(This column originally appeared in The Inquirer)
The benefits employees request most, according to a recent survey from the Society for Human Resource Management, should come as little surprise to employers: health care, retirement, and flexibility. Dependent care assistance and mental health support are also high on the list.
But employers who want to attract great talent and retain great employees might look to provide additional, lesser-known benefits. Here are five to consider.
Offering a health savings account
Health Savings Accounts (HSAs) can be used with high deductible insurance plans and are inexpensive to setup with your benefits provider. Once created, employees can contribute up to $4,150 for themselves or $8,300 for their family annually. (Employees who are 55 or older can contribute an additional $1,000 as a catch-up contribution.)
These contributions are not taxed, and employees can use the invested funds for unreimbursed health-care costs such as eyeglasses and hearing aids.
Unlike a Flexible Spending Account (FSA), an HSA’s unused funds can roll over from one year to the next and continue to grow.
Wendy Whitmoyer, who manages employee benefits at Carpenter Technology in Philadelphia, says her company has been offering HSAs for years, and they’ve become more popular than FSAs.
“With an HSA you don’t have to worry about losing unused funds and you can invest what you save,” she said. “It’s like a 401(k) for their health care.”
Helping with hardship
Thanks to 2022′s SECURE 2.0 Act, it’s now easier for employers to help their employees put money away for hardship expenses.
Labor and employment lawyer Robert Kaplan, of Cozen O’Connor in Philadelphia, recommends implementing a “self-certification process” for 401(k) participants. This makes it easier for employees to get a hardship distribution from their 401(k) to handle “an immediate and heavy financial need.”
This has also “eased the burden on employers because they no longer have to review each distribution request,” he said.
New regulations also allow the addition of a nonretirement emergency savings account of up to $2,500 to 401(k) plans.
“Those funds can be used by employees for any purpose without the employee needing to tap into retirement funds or be subject to taxes for using the money,” Kaplan said.
Paying every day
With a majority of Americans living paycheck-to-paycheck, according to recent studies, some companies are paying employees more frequently.
Services like DailyPay and PayActiv can integrate with an existing payroll system, perform all calculations, and allow the employer to pay employees via debit card without any change to payroll funding.
“The process is quite simple,” said Ted Millstein, an executive with health-care provider Patriot Home Care, which uses DailyPay. “An algorithm is used to calculate taxes and other deductions, and the net pay is available the day after the shift is completed.”
“The employee can choose to have the funds transferred to them at any time thereafter,” Millstein added. “Any funds not transferred to the employee through DailyPay is paid on their regular payday.”
Encouraging community involvement
Supporting an employee’s involvement in their community and causes they care about doesn’t just reflect positively on a company. It can also come with a significant tax deduction.
Evolution Financial Group, a financial services firm based in Media, frequently matches employees’ charitable contributions and hosts an annual golf tournament to raise funds for breast cancer research.
“This spirit of giving extends beyond individual passions, as our team members often collaborate to support the organizations their colleagues care about,” said director of operations Michele Mansi.
Paul Zaengle, managing partner of Nimbl Consulting in Berwyn, says his firm’s charitable arm, called “Nimblthropic,” allows employees to recommend charities where the company can contribute money, time, and resources.
They’re working to form an employee board to run Nimblthropic in its entirety, Zaengle said. “We want leadership to take a step out of it completely and have the employees own it.”
Paying for education
Many employers take advantage of the education tax deduction, which allows them to deduct up to $5,250 per year per employee to pay for their educational expenses.
The deduction does not require the education to be related to the employee’s job, and employees do not get taxed on this perk.
Heart + Paw, a Philadelphia-based veterinary company, offers employees fully paid scholarships through a partnerships with Penn Foster, an online veterinary technology program.
Heart + Paw also offers a mentorship program for new graduate veterinarians to participate in rounds with their veterinarians.
“We see too often people burning out too quickly and leaving the profession,” Charlene Wandzilak, vice president of people + culture. “So, we wanted to do something different that really created an environment where people could thrive.”
