Small business owners will learn about the options available to them when considering a benefits package for themselves and their employees. They will also learn to assess the benefits of having a solid benefit package and options for structuring the plan to minimize the overall expense.

1. Sigma Free
Presents…
Employee Benefits
Creating the Right Package
Sponsored by:
Provided by Sigma College of Small Business, Inc.

2. Sponsored by:
Agenda
Introductions
Keynote Topic
Employee Benefits
Creating the Right Package
Our Sponsor:
Freeman & Sherburne
Break – Refreshments and Networking
Ask
Questions
Any Time Keynote Conclusion
Employee Benefits
Creating the Right Package
Employee Benefits ‐ Creating the Right Package 2
Copyright 2010, Sigma College of Small Business, Inc.

3. Sponsored by:
Value of a Benefits Package
• Tax advantages
– Use pre‐tax dollars to pay
– Example
• Find and keep a better
work force
– Competing for talent
– Cost of turnover
– Cost of an “unhealthy”
work force What would you do if a valued,
uninsured employee had a major
• The “Right Thing” medical issue?
Employee Benefits ‐ Creating the Right Package
Copyright 2010, Sigma College of Small Business, Inc.
3

4. Sponsored by:
Health Insurance Confusion
Coverages Amount of Coverage
• Preventative Care • Mix of employer to
• Hospitalization employee
• Prescriptions • Vision, Dental
Types of Plan
• Group or Individual
• Managed or Fee for
Service
Costs • HMO, PPO, POS Networks
• Premium • In network
• Co‐Pay • Out of network
• Deductible • Available physicians
• Max Out of Pocket
Employee Benefits ‐ Creating the Right Package
Copyright 2010, Sigma College of Small Business, Inc.
4

5. Sponsored by:
Comparison of Types of Coverage
Fee‐for‐Service
Group Plan
(Indemnity) • “Risk” averaged across company
• Requires minimum enrollment
Individual Plan
• “Risk” is for individual and family
• Typically less expensive
POS
Monthly
Premium
HMO
PPO
High Deductible
Plan “Out of Pocket”
(Copays, Deductibles, Out of Network)
Employee Benefits ‐ Creating the Right Package 5
Copyright 2010, Sigma College of Small Business, Inc.

6. Sponsored by:
Costs
• Premium
– Monthly payment
– Typically shared between employer and Consider all
employee
costs when
• Co‐pay determining
– Standard “per‐visit” amount paid
the right
• Deductible
package for
– Amount paid before insurance “kicks in”
– Deductibles are for individual family members
you and
• Maximum Out‐of‐Pocket employees.
– Maximum amount that will be paid by individual
– Typically less than combined deductibles
Employee Benefits ‐ Creating the Right Package
Copyright 2010, Sigma College of Small Business, Inc.
6

7. Sponsored by:
Total Cost Example
Business owners need to look at and have their employees
consider the “total cost” of the plan.
Employee Benefits ‐ Creating the Right Package 7
Copyright 2010, Sigma College of Small Business, Inc.

8. Sponsored by:
Paying the Out‐of‐Pocket
• Flexible Savings Account – FSA
– Pre‐tax dollars for out‐of‐pocket medical
– Determine amount to be withheld from pay
– Use it or lose it
• Health Savings Account – HSA
– Employee and Employer contribute pre‐tax
– Contribute at will – can change amount
– Owned and moves with employee
• Health Reimbursement Arrangement – HRA
– System for employer to reimburse out‐of‐pocket
– Pre‐paid cards used by employees then paid by employer
Employee Benefits ‐ Creating the Right Package
Copyright 2010, Sigma College of Small Business, Inc.
8

9. Sponsored by:
Designing the Plan
• What type of plan
– Managed currently offers best pricing
– High deductible with HSA becoming popular
• How much to pay
– Remain competitive in line with other
objectives
– Consider tax benefits
• Add ons
– Dental, Vision
• Changing plans
– How to approach rising costs
• Health Care Reform – what will it mean?
Employee Benefits ‐ Creating the Right Package
Copyright 2010, Sigma College of Small Business, Inc.
9

10. Sigma Free
Presents…
Employee Benefits
Creating the Right Package
Sponsored by:
Provided by Sigma College of Small Business, Inc.

11. Sponsored by:
Retirement Plans
Types and Terms
• Qualified v. Non‐qualified
– Qualified is pre‐tax and tax‐deferred
earnings
• Time and Cost to Administer
– Forms and third parties required to start
and administer the plan
• Contribution Limits
– Limits on the amount that employees and
employers can and/or must contribute
• Highly Paid Employee
– Qualified plans have rules to prevent
discriminatory practices and
disproportionate contributions
– Safe Harbor
Employee Benefits ‐ Creating the Right Package
Copyright 2010, Sigma College of Small Business, Inc.
11

12. Sponsored by:
Retirement Plans
IRA Based Plans 401(k) Based Plans Other
Payroll SEP IRA SIMPLE IRA 401(k) Safe Harbor Profit
Deduct IRA 401(k) Sharing
Key Employee Employer Employee Higher limits Contribution Discretionary
Difference only only contributes, requirements, annually,
contribution contributio Employer matches no test for must offer to
n discrimination all
Contributors Employee Employer Both Both Both Employer
Max Annual $5,000 25% NTE Ee ‐ $10,500 Ee ‐ $15,000 Ee ‐ $15,000 Set annually
Contribution $45,000 Er – Match to 3%, Co – 100% of Co – 100% of
or 2% comp NTE comp NTE
$45,000 $45,000
Contributor Ee can decide Er can Ee can contribute, Ee and Er can Ee can Er according
Options at any time decide Er must match contribute contribute, Er to plan terms
year to must match
year
Vesting Immediate Immediate Immediate 100% Ee – Immediate Ee and most Er According to
100% 100% 100% ‐Immediate plan terms
Er ‐ optional 100%
Employee Benefits ‐ Creating the Right Package
Copyright 2010, Sigma College of Small Business, Inc.
12

13. Sponsored by:
Disability
• Pays when a medical condition
prevents working
– Most working adults are more likely to
become disabled than to die
• Short Term Disability
– Effective for several months (typically
180 days)
– Percent of salary
• Long Term Disability
– Becomes effective after a specified
waiting period
– Amount and waiting period affect
premium
Employee Benefits ‐ Creating the Right Package
Copyright 2010, Sigma College of Small Business, Inc.
13

14. Sponsored by:
Additional Benefits
• Life Insurance
• Vacation
• Sick Days
• Holidays
• Education
• Voluntary Programs
Employee Benefits ‐ Creating the Right Package
Copyright 2010, Sigma College of Small Business, Inc.
14

15. Sponsored by:
Sigma College of Small Business
• Focus Workshops Critical Business
– YouTube: Grow Your Business with Online Areas
Video Strategy and Planning
• Tuesday, May 18, 2010 Marketing and Sales
• 9am – 12pm, $99 Accounting and
• Upcoming SigmaFree Classes Finance
– 5/18 – No Class Operations and
Quality
– 5/25 – Business Networking for the Non‐
Leadership and
Networker
Administration
– 6/8 – What’s the Best Entity? Solve the
Technology and
Mystery of Legal Organization Innovation
Dedicated to the Learning Needs of Small Business!
Copyright 2010, Sigma College of Small Business, Inc.
15

16. Sigma Free
Presents…
Employee Benefits
Creating the Right Package
Sponsored by:
Provided by Sigma College of Small Business, Inc.