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Benefits To Offer Part-Time Employees

Gavin Oxley11 Oct 2021

Offering benefits to part-time employees is typically considered to be too expensive because of traditional health insurance. However, there are many benefits you can offer your part-time employees that are different and less expensive than that. Although employers are not obligated to offer benefits in addition to standard pay, it can set your business apart from the competition during an aggressive hiring market. 

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Benefits To Offer Part-time Employees

Providing benefits to your part-time employees is both possible and affordable if you know what you want to offer and how you plan to offer it. We will help you explore benefit options and how offering benefits to part-time employees can be achieved.

Common benefits that an employer may be able to offer their part-time employees may include but are not limited to the following:

In regards to health benefits, it may not be practical for an employer to offer a full health insurance plan. One alternative may include a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) which is available to small businesses with fewer than 50 full-time employees. 

Using QSEHRA, employees are able to receive help with medical care payments by seeking partial reimbursement from their employer. Employees are usually required to seek care and pay the insurance provider in full before filing for reimbursement. All reimbursements are tax-free for both the employee and the employer.

Other non-insurance healthcare benefits could include a care membership, where an affordable monthly membership fee is paid in order to seek medical services for discounted prices. This is not insurance but it is a way to get discounted access to healthcare primary, preventative, behavioral, and urgent care needs. Mira is an example of a type of care membership program that offers different plans and payment options starting at just $25 per month per employee. The sign-up is straightforward and user-friendly, and the customer service team offers assistance in helping members navigate to the most affordable care options nearest them.

In addition to attracting more qualified employees to apply for your open job, offering employee benefits can be beneficial to the overall company as well. The right benefits can often improve employee morale, increase productivity, and raise the retention rate of employees. If you hire part-time employees frequently then this could save you a lot of time and money in the long run.

Requirements to Offer Employee Benefits

The Affordable Care Act (ACA) is the leading authority on how to provide benefits to part-time employees at your workplace. According to the ACA, if benefits are offered to some part-time employees, the same benefits must be offered to all part-time employees that perform work similar to those to whom insurance is already offered.

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If you already offer a benefits package to any full-time workers, it’s important you make sure that your insurance supplier is able to provide benefits to part-time employees in the first place. That is if you can afford to offer the same types of benefits to your part-time workers. If this isn’t possible then you’ll want to consider what other affordable options might be possible.

To cover all bases and to avoid liability issues, it is wise to document what requirements the company has set for part-time employees to qualify for benefits. As an employer, you would often be less likely to offer benefits to a part-time employee who works one hour per week than an employee who works 20 hours a week or more. A workplace manual is a good place to list the requirements for benefits and you have to make sure that you’re

In some cases, benefits must be offered to a certain percentage of employees in order for the plan to continue to be valid. This is referred to as Minimum Participation Requirements and are most common when benefits are given through a formal insurance provider.

Additionally, the Employee Retirement Income Security Act (ERISA) requires employers to offer the same retirement plan that is offered to all other employees to any part-time worker who has worked 1000 or more hours within a 12-month window. This requirement will change your benefits plans because these employees are considered full-time for the sake of benefits. 

Note that other state and local laws may institute other requirements for employers to offer benefits to part-time workers or even have benefits that are required to be offered to employees of any level.

Should You Offer Benefits

If you are considering offering some amount of benefits to your part-time employees, it is important to understand what benefits you should be offering. As an employer, you should think through the following questions and select benefits that fit the criteria.

  1. Is the business able to afford benefits?
  2. What type of benefits do part-time employees most need at this business?
  3. Are the employees eligible for this type/level of benefits?
  4. Where are the benefits going to be provided from?

Considering the type of benefits that will most assist and interest your employees is crucial to employee and employer satisfaction. Offering something just to make yourself feel better won’t help the business if the employees don’t care for what you offer. Make sure it aligns with their needs. 

5 Steps to Offering Benefits to Your Part-time Employees

There is quite a bit of information in offering benefits to part-time employees, from finding the right benefits to administering each correctly and abiding by all rules and regulations. Here is a quick rundown of the five steps to take when offering benefits to your part-time employees:

Step 1: Check the legal requirements behind offering specific benefits to part-time employees. All benefits offered must comply with the ACA, the ERISA, and any and all local and state regulations.

Step 2: Find a provider that is able to offer the benefits that you are seeking to provide. Not all providers are able to offer affordable benefits to part-time employees. 

Step 3: Devise a purchasing plan to be able to afford the benefits. Make sure the requirements for benefits and the payment are well documented in order to avoid liability. 

Step 4: Distribute and facilitate the benefits. Some benefits, especially healthcare and retirement benefits, often require constant action on behalf of both the employer and the employee. Payment should be kept up to date and plans updated as necessary.

Step 5: Discontinue any benefit plans that employees no longer meet the requirements for. If an employee drops below the required work hour threshold, their benefits should be dropped in order to save the employer money and to incentivize greater work participation.

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Offering Benefits to Part-Time Employees: Frequently Asked Questions (FAQs)

Offering benefits may still be confusing, but it doesn’t have to be. Below we will walk through some more common questions associated with providing benefits to part-time employees.

How do I offer tuition reimbursement to my part-time employees?

Since so many part-time employees are also full or part-time students, one of the most attractive benefits that an employer may be able to offer is tuition reimbursement. Sometimes employers may offer tuition reimbursement for a degree in any field, but often employers will only offer reimbursement for a degree in a field related to their job through the employer.

In addition to the business advantages of offering benefits in general, providing tuition reimbursement to part-time student employees allows the employer to be eligible for a tax-deductible of up to $5,250 annually per employee that the reimbursement is provided to.

Some employers place stipulations on the schooling of the reimbursed student. 

This may include only funding a certain number of courses or credits or funding a certain percentage of the student’s full tuition. Additionally, some employers may require the employee to take courses online where the maximum amount of courses can be taken for a minimum amount of spending.

Why would I hire a part-time employee instead of a full-time employee?

Employers often hire part-time employees to fill gaps in lower-level workload. Part-time employees are generally kept at a lower retention rate than full-time employees because they are not offered benefits, are transitioning to a full-time job, or only intended the part-time job to fill an employment gap.

Part-time employees are, however, generally cheaper to hire for the employer and are less of a commitment to train. One downside of part-time employees is that they are often less professionally and technically trained and are often only able to perform basic services and tasks.

Additionally, an employer may consider hiring a part-time employee based on the number of hours per week that the job the employee is hired for should take to do. There is no reason to hire a full-time employee for a job that will only take 20 hours a week to complete.

What are the cons to offering benefits to part-time employees?

Generally, offering benefits to part-time employees might outweigh the costs, but here we outline a few of the cons that offering benefits may entail: 

  1. Offering benefits is much more expensive for small businesses than for large corporations.
  2. Providing more benefits to a larger pool of employees requires the business to pay more administrative fees.
  3. There is less choice in offering plans to part-time employees than full-time employees.
  4. Stringent laws and regulations must be followed both by the employer and the employee. Violations by either party can lead to costly legal issues.

Bottom Line

Offering benefits to part-time employees does not have to be as difficult or expensive as many business owners think that it is. Providing benefits to part-time employees often benefits both the employer and the individual employee. The employer is able to attract and retain better talent, saving money, increasing income, and saving a lot of time hiring. The key is finding the right benefits that will provide something that your employees are looking for.

Mira is able to provide an affordable employer-sponsored healthcare membership that can attract and retain employees while providing basic care that they may otherwise lack. For just $25 per employee per month, you can help your employees get access to essential healthcare services. Healthcare means healthier and more productive employees and a competitive workforce. Sign up today!