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Archive for Thursday, April 22, 2010

Smaller firms strive to offer health perks

April 22, 2010

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Being a small company doesn’t always make it hard for owners to offer health insurance or retirement programs for their employees.

The programs are important, owners say, because it helps them retain their workforce.

According to the U.S. Small Business Administration, small businesses have felt the effects of the economy. More than half of the 763,000 jobs lost in the first two quarters of 2008 were lost in small firms.

“Now is the time where we really need to hold onto our good workers,” said Beth Anne Branden, owner of BA Designs in Topeka. “The loss of key employees can be extremely expensive.”

Various benefits

Benefits at some small businesses range from vacation, 401(k), contributions to health plans and even lunch on Saturday.

“I pay the first $200 of an employee’s health insurance premium and the remaining is their responsibility,” said Brenda McFadden, owner of the McFadden Group, a certified public accounting firm in Lawrence, which has fewer than 25 employees. “The remaining premium is run through our cafeteria plan so the cost comes out of their checks pre-tax.”

Along with health insurance, the McFadden Group also has a medical reimbursement plan that allows employees to have a set amount come out of their check pre-tax to pay for certain medical expenses.

“The same is true for day care expenses,” McFadden said. “Family is very important to me, so the families of my staff members are important to me as well.”

Employees at McFadden Group accrue up to five days a year for sick leave, and the company’s vacation policy depends on an employee’s years of service.

“If an employee has been working with me for one year, they will have one week of vacation time; two years is two weeks; and five years is three weeks of vacation,” McFadden said.

McFadden also buys lunch for her staff who work on Saturdays.

“Every Saturday we rotate who gets to pick which restaurant they would like to go to,” McFadden said. “If it’s one of my employees’ birthday, then they’ll get to pick where we all go to lunch.”

Along with a free meal, McFadden will also stock up the refrigerator in her company’s break room with soda and snacks and she allows jeans to be worn on Fridays.

“I make sure our office space reflects who we are,” McFadden said.

Branden at BA Designs says that she contributes 60 percent of the insurance premium and the other 40 percent is the responsibility of her employees.

“When it comes to profit sharing, I match up to 3 percent of what an employee contributes,” Branden said. “I also offer a $50,000 life insurance policy to each employee.”

BA Designs has a pre-tax flex spending account that allows an employee to choose where his or her benefit dollars will be spent.

“Each person must estimate the costs that they’ll acquire and have that estimated amount redirected from wages into this plan,” Branden said. “So if a staff member gets a receipt from their doctor for medical purposes, they’ll give that receipt to the company and that amount of money will be taken out of the flex spending account.”

Incentive programs

Branden constructed a management incentive program that is based off how well BA Designs does.

BA Designs also gives up to 10 percent bonuses to its employees based on how well the company does.

“Our interior design competitors don’t offer everything that we offer; we want the best of the best of the best when it comes to our employees,” Branden said.

Larry McElwain, funeral director at Warren-McElwain Mortuary in Lawrence, contributes 50 percent of an employee’s health insurance premium and provides his 18-member staff with a 401(k) retirement savings plan.

“My employees tell me how much money they want to contribute to this account and then that amount is deducted from their salary before taxes are applied, so pre-tax dollars are being taken instead of after-tax dollars,” McElwain said.

Employees are also offered educational workshops and club memberships to the Lawrence Central Rotary Club and the Lawrence Chamber of Commerce.

“We provide what we can provide,” McElwain said. “And we’re constantly shopping the health plan.”

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