Question

Activities (General Research Section)

Describe the various types of employee benefits plans typically offered by small businesses. What issues do you find with different types of plans?

Activities (Company-Specific Section)

       Describe what plans you would need in order to start or run your preferred type of small business. (consider mandatory requirements)

       Explain why you chose each plan. Is each plan needed to start the business, or could some plans be added at a later stage?

       Describe the company's financial and managerial responsibilities in regard to each type of plan you chose.

       What steps would you take to better understand the costs involved in the type of plan you choose? Give one example.

Answer 1

One cannot ignore the cost, specially for small businesses, of offering employee benefits.

Type of benefit plans offered by small businesses are:-

1) Healthcare Benefits :-

?Issue:- ?Affodrability, Less options to design/choose the plan, Administrative overheads, Wrong plans can lead company to incurr large legal costs

2) Retirement

?Issue: ?Time consuming and complications involved in setting such plans, Require professional assistance and that can be expensive.

3)Paid Time Off

?Issue: ?Not effective use; employees might use this break to work somewhere else, Sick to work problem after paid time off.

B)

It really depends upon the country of operating and also the state in which one is doing business. Certain countries and state mandatory require disability insurance.

Mandatory Plans are also dependant upon the size of the company so if the company has started and has few employees, say less than 50 ( in most of the countries), disability insurance and premise insurance would be enough. Plans can be added at the later stage as the company grows.

?Plan	?Financial Responsibilites	?Managerial Responsibilites
Health Benefit	On average, 80% of the premium amount	Selecting the right plan and timely premium payment
Retiement Benefits	Employee has to provide for 100% of the cost. Shortfalls if its a self funded plan	Require expert to set up and manage
Paid Time off	Its genarally 3-4% of the total compensation	No to few managerial responsibilties such as keeping record.