No longer nice-to-have: 8 essential benefits for full-time employees

Fringe benefits and other perks used to be an unexpected but welcome addition above and beyond an employee's salary. However, in today's competitive job market, employee benefits are no longer viewed by job seekers as a nice to have. Employees are actively looking for employers who offer a comprehensive employee benefits package that prioritizes well-being, supports a healthy work-life balance, and helps employees save money.

Understanding employee benefits is not just about compliance; it's a strategic business consideration that impacts recruitment, retention, employee productivity, and overall organizational success. In this article, we explain eight essential benefits for full-time employees that employers should be offering if they want their employees and their business to thrive.

What are full-time employees?

Knowing what constitutes a full-time or part-time employee is important in ensuring mandatory employee benefits are allocated to eligible employees. However, what constitutes a full-time employee isn't always cut and dry.

The Fair Labor Standards Act (FLSA) doesn't define full-time or part-time employees, but the Internal Revenue Service (IRS) determines an employee to be full-time if they average at least 30 hours of service per week or 130 hours of service per month. This means that generally, whether an employee is classed as a full-time employee is decided by the employer based on the number of hours worked. Many employers class employees to be full-time if they work 30-40 hours a week or more, and part-time if they work 30 hours or less.

Both full-time and part-time employees must be paid at least the federal minimum wage (or the state minimum wage if it is higher). The FLSA establishes the federal minimum wage. Non-exempt employees, whether full-time or part-time, are also eligible for overtime pay at a rate of 1.5 times their regular hourly rate for hours worked beyond 40 in a workweek.

Many employee benefits are often tied to full-time employment. Employers are generally required to offer certain benefits to full-time employees under the Affordable Care Act (ACA) if they have 50 or more full-time employees. However, this does not mean that benefits cannot and should not be extended to part-time employees. If employers prioritize building an equitable and inclusive workforce, then supporting part-time employees is just as crucial as supporting those who work full-time.

The importance of employee benefits

Employee benefits don't just make a big difference to individual employees; they are highly advantageous to businesses and can have a major impact on their bottom line. Some of the most important aspects of employee benefits include:

Attraction and retention of talent: Competitive and comprehensive employee benefits can attract top talent to an organization and help retain existing employees. One study found that 75% of employees are more likely to stay due to their provided benefits package. In today's competitive job market, candidates often evaluate the overall compensation package, including benefits, when considering job offers.

Employee satisfaction and morale: When employees feel that their well-being is a priority and that they are taken care of, it can boost their satisfaction, engagement, and loyalty to the company.

Productivity and performance: Employees who feel supported by their employer through benefits are likely to be healthier and more focused on their work. This can lead to increased productivity and better job performance. An AON study found that 60% of small-sized and 69% of medium-sized businesses who offer health and wellbeing benefits say that they have improved productivity levels.

Health and wellness: Health coverage benefits, such as medical insurance and wellness programs, can contribute to a healthier workforce. Healthy employees are generally more productive, take fewer sick days, and can reduce overall healthcare costs for both employees and employers.

Legal compliance: Employers need to understand the legal requirements and regulations related to employee benefits. Failure to comply with laws such as the Affordable Care Act (ACA) or Employee Retirement Income Security Act (ERISA) can lead to legal issues and financial penalties. Legally required benefits, according to federal law, state law, or local laws include:

• Unemployment insurance
• Family and medical leave
• COBRA continuation coverage
• Workers' compensation insurance

Essential benefit #1: Health insurance

Health insurance is a common employee benefit, with 55% of the U.S. population reporting they received  employment-based health insurance coverage in 2022. While the ACA dictates that employers with 50 or more full-time equivalent employees are generally required to offer health insurance to their full-time employees, small business owners and their employees can also benefit from medical coverage as an employee benefit for several reasons:

• Financial protection: Health insurance provides financial protection by covering a significant portion of medical expenses. Without insurance, individuals may face high out-of-pocket medical bills, potentially leading to financial strain or even bankruptcy in the case of a major medical event.
• Access to healthcare: Health insurance facilitates access to a wide range of healthcare services, including preventive care, doctor visits, hospital stays, and prescription medications. Having coverage encourages individuals to seek timely medical attention, promoting overall well-being.
• Preventive care: Many plans cover preventive services at no additional cost to the insured. This emphasis on preventive care can help catch health issues early, leading to better outcomes, less employee sick leave, and lower overall healthcare costs.
• Employer attraction and retention: Offering health insurance as part of their employees benefits package can help retain existing talent as well as attract new, highly skilled candidates. Access to healthcare coverage is a significant factor for job seekers, with 96% of Americans believing it is important that a job offers insurance.

There are varying types of health insurance, with health insurance companies often offering different levels of coverage: Bronze, Silver, Gold, or Platinum. However, the four main insurance plan types are Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Point of Service (POS), and Exclusive Provider Organization (EPO).

How health insurance works

Health insurance works by covering most medical and surgical expenses in exchange for monthly premium payments. Usually, the higher the monthly premium, the lower the out-of-pocket costs will be. Insurance plans can have deductibles and co-pays, but out-of-pocket maximums are now capped by federal law. Every plan will be different but the key aspects are:

• Premiums: The regular, often monthly, payments to maintain health insurance coverage.
• Deductibles: The initial amount the insured must pay out of pocket before the insurance plan starts covering costs.
• Co-pays: Set fees that the insured has to pay for specific services such as doctor visits or prescriptions.
• Out-of-pocket maximums: The maximum amount the insured has to pay in a given period. Once reached, the insurance plan covers the remaining eligible expenses.

Essential benefit #2: Retirement plans

A retirement plan provides peace of mind that an employee's future will be financially secure. For employers, offering good retirement savings plans offers a competitive advantage in the job market and helps retain employees.

The Employment Retirement Income Security Act (ERISA) does not require any employer to establish a retirement plan. It only requires that those who do establish plans meet certain minimum standards. However, some states, such as California and Illinois, now have or are in the process of implementing retirement plan mandates.

Some of the most common types of retirement plans offered to employees include:

• 401(k) plans
• 403 (b) plans
• Employee Stock Ownership Plan (ESOP)
• Simple IRA

How retirement plans work

How a retirement plan works depends on the type of plan in place. A defined benefit plan promises a set monthly benefit at retirement. This can be given as a specified dollar amount, such as $1500, or through a formula based on salary and length of service, for example, 2% of an employee's average salary over 10 years.

In contrast, a defined contributions plan does not deliver a set amount on retirement. Instead, employee contributions, employer contributions, or both contribute to the employee's individual account under the retirement plan and then these contributions are usually invested on behalf of the employee. The amount the employee receives from the plan will ultimately depend on the fluctuations in the value of the investments.

Employer contributions and vesting schedules are important aspects of employee retirement plans. Employer contributions are what an employer gives toward an employee's retirement plan. They can take several formats including matching contributions, non-elective contributions, profit-sharing contributions, and safe harbor contributions.

Vesting refers to the process by which employees gain ownership of employer-contributed funds in their retirement accounts. Employees are always 100% vested in their own contributions, but vesting schedules apply to employer contributions. Types of vesting schedules include immediate vesting, graded vesting, and cliff vesting.

Essential benefit #3: Paid time off

A survey by the Pew Research Center found that 62% of US workers believe it's extremely important to have paid time off despite US employees not legally being entitled to any paid holidays, sick leave, or public holidays. However, many employers recognize the value of offering paid time off as part of their employee benefits package.

Employees are entitled to unpaid time off in some circumstances. For example, the Family and Medical Leave Act allows certain employees to take 12 weeks of unpaid, job-protected leave annually. But many employers also offer paid leave beyond the FLMA requirements. Organizations are realizing that having time away from work is necessary for employees to deal with other important aspects of their lives, prevent burnout, and create a healthy work-life balance. Types of paid leave employers can offer include:

• Vacation time
• Paid sick leave
• Parental leave
• Bereavement leave
• Personal time
• Jury duty pay
• Voting time
• Compensatory time

How paid time off works

Employees have days off from work without any loss of pay. The number of days they are allowed should be outlined in their contract. When these days are taken depends on the policy in place and the type of time off it is. For example, sick leave is taken when an employee is too unwell to come to work and might be for a single day or an extended period. Time off for vacations can be requested by the employee.

Accrual and carryover policies are two common aspects of policies that organizations use to manage and administer employee leave. Accrual is the process of gradually earning and accumulating paid time off based on the length of time an employee has worked for an organization. For example, an organization may establish that employees earn 1 hour of PTO for every 40 hours worked. Carryover refers to the practice of allowing employees to carry over unused accrued PTO from one accrual period to the next. Some organizations have a 'use it or lose it' policy, where employees forfeit any unused accrued PTO at the end of the accrual period. In this case, there is no carryover. Where carryover is permitted, there is likely to be a maximum limit on the number of hours or days that can be brought forward. 

Some organizations now offer employees unlimited PTO, although it isn’t a commonplace benefit with only 20% of businesses offering PTO. However, companies looking to attract top-tier talent may consider this offering, as 72% of employees list unlimited PTO as the employee benefit that interests them most. 

Essential benefit #4: Life & disability insurance

Employee injury can be life-altering and should they pass away, it can have a massive financial impact on their family, especially if they have dependents. Disability and life insurance protect the employee and their family should the worst happen.

Life insurance is an optional employee benefit that employers can offer. Disability insurance and disability benefits can be optional or mandatory, although many employers choose to offer one or both types to their employees.

How life & disability insurance works

In exchange for the premium paid, these insurances deliver payments or a lump sum that can be used for living expenses, help to pay off debts, and generally provide financial security.

Disability insurance generally takes two formats: short-term disability insurance and long-term disability insurance. Short-term disability insurance is designed to provide an income to employees (typically 50-67% of their usual salary) should they become disabled due to sickness or injury. This type of policy usually has a maximum number of weeks, with the industry standard being 26 weeks. Long-term disability benefits cover employees who become disabled for a longer period and there is usually a maximum dollar amount per weekly or monthly payout.

Life insurance plans pay out upon an employee's death, giving their dependents crucial financial support. The amount paid out depends on the level of coverage.

Essential benefit #5: Women’s and family health benefits

In the US, almost 47% of workers are women and 70% of mothers with children under the age of 18 are in work. Despite this, having minor children at home still disproportionately harms women’s employment prospects, and there are significant gaps in gender employment rates and pay. This landscape can result in women having to unfairly choose between a family or a career.

LGBTQIA+ employees make up 5.9% of the workforce but members of this community face greater barriers in the workplace and also often face significant hurdles in accessing family planning support.

Women's and family health benefits are a crucial component in tackling these inequalities. Companies such as Maven offer inclusive benefit programs that support employees through their entire reproductive health journey, from preconception and fertility all the way through menopause and beyond.

How women’s and family health benefits work

Women's and family health benefits offer an end-to-end platform that meets the diverse needs of employees of all backgrounds, ethnicities, genders, and sexual orientations.

Maven provides inclusive, comprehensive support for all employees throughout the family journey by eliminating care gaps and creating better experiences for all. Maven members receive personalized, timely support from preconception to parenting and beyond, assisting them when they need it most. Employees can curate their team of healthcare specialists based on their preferences and have 24/7 virtual access to expert practitioners from mental health providers to nutritionists.

Essential benefit #6: Employee assistance programs

Employee Assistance Programs (EAPs) are vital for promoting employee well-being and productivity. EAPs offer confidential support for personal and work-related challenges, including mental health issues, stress, and substance abuse. By providing a confidential and accessible resource, EAPs contribute to a healthier workplace, reduce absenteeism, and improve employee morale.

There are no specific federal laws mandating EAPs, but employers must comply with privacy laws such as the Health Insurance Portability and Accountability Act (HIPAA). State laws may vary. Offering EAPs voluntarily is a strategic choice, aligning with Occupational Safety and Health Administration (OSHA) guidelines promoting mental health support.

How employee assistance programs work

EAPs provide confidential, short-term counseling and support services to employees facing personal or work-related challenges. Employees can access these services voluntarily and confidentially, often via phone or through an online portal. EAPs aim to assist employees in addressing issues early, preventing them from negatively impacting job performance and well-being.

Counseling services within EAPs offer confidential sessions with trained professionals, addressing various concerns such as stress, anxiety, relationship issues, and more. These services provide employees with a supportive environment to explore challenges, develop coping strategies, and work toward solutions. The goal is to enhance employees' emotional well-being, resilience, and overall job satisfaction.

EAPs often include referral services to connect employees with specialized resources, such as mental health professionals, legal advisors, or financial experts, based on the nature of their challenges. Referral services ensure that employees receive the appropriate assistance beyond the scope of the EAP, promoting comprehensive support for various needs.

Essential benefit #7: Tuition reimbursement

Tuition reimbursement can be a key part in fostering employee development and organizational growth. It demonstrates a commitment to continuous learning, boosts employee loyalty, and attracts top talent. Employees, in turn, acquire new skills that benefit both their careers and the company.

No federal law mandates tuition reimbursement, but if an employer offers it, policies should be equitable and non-discriminatory. Employers often set eligibility criteria, such as minimum service requirements, to manage costs. Communication of policies and consistent application are key to legal compliance.

How tuition reimbursement works

Tuition reimbursement is a program where employers financially support employees pursuing education. Employees typically pay for courses upfront and then submit receipts and proof of completion to their employer. Upon verification, employers reimburse a portion or the entirety of eligible expenses.

Employers may set grade requirements to ensure a minimum level of academic achievement. Commonly, employees must earn a passing grade, such as a 'C' or higher, to qualify for reimbursement. This ensures a return on investment for the employer and encourages employees to dedicate effort to their studies.

Some employers also establish repayment agreements, requiring employees to reimburse tuition costs if they leave the company within a specified period after completing the course. These agreements help further protect the employer's investment in the employee's education.

Essential benefit #8: Flexible working arrangements

According to the New World of Work survey, 58% of employees state that the ability to work flexibly is important, with better balancing of personal and professional priorities being the main benefit. And there's evidence that suggests flexible working is good for business too. An Atlassian study revealed that innovation and organizational culture improve when flexibility is offered, and employee burnout is reduced.

No law stipulates employers must offer flexible working in the US, however, many choose to in some format. Common flexible working arrangements include:

• Telecommuting/remote work: Employees work from a location outside the office.
• Flexible schedules: Employees have flexibility in setting their daily or weekly work hours.
• Job sharing: Two or more part-time employees share responsibilities for one full-time position.
• Compressed workweek: Employees work full-time hours in fewer than five days per week.
• Flexitime: Employees have flexibility in starting and ending their workday within certain parameters.
• Part-time work: Employees work fewer than standard full-time hours.

How flexible working arrangements work

Flexible working arrangements provide employees with alternatives to traditional work structures. Employees and employers agree on a set of arrangements that accommodate both parties. This often involves discussions about work hours, location, and specific expectations. Successful implementation relies on effective communication, trust, and collaboration between employers and employees.

Remote work, for instance, allows employees to perform their job duties from a location outside the traditional office, often from home. Flexible schedules allow employees to adjust their daily or weekly work hours. This can involve variations in start and end times, compressed workweeks, or arrangements that better align with personal preferences or family needs. Flexible schedules aim to accommodate diverse lifestyles while ensuring that work goals are still met.

Other common benefits

There are also other employee benefits that are also worth considering. Common employee benefit types that many employers offer include:

• Dental coverage
• Eye care
• Wellness programs
• Transportation benefits
• Flexible spending accounts
• Childcare assistance
• Bonuses and profit-sharing
• Legal assistance
• Financial planning services
• Paid sabbatical
• Pet insurance

Employee benefits that matter with Maven

Maven can transform your employee benefits, driving improved health outcomes, elevating company culture, and making your organization stand out to prospective candidates. As the world’s largest women’s and family healthcare company, we provide inclusive employee benefits through an innovative platform. With a holistic, personalized approach to care, we help businesses support their employees as they start and raise their families. If you're an employer interested in how Maven can support you in delivering better outcomes for your workforce and your business, book a demo today.