The Challenge of Offering Benefits to the Hourly Workforce In This New Normal

In times of crisis or in this new normal, as we look toward a different way of conducting business, one thing will remain true – employers must always uphold their workforce’s benefits. As the majority of security personnel are part of the hourly workforce, security companies that offer comprehensive benefits, especially medical, will be more attractive than other competitors. For this new normal, a company perk can include paying their essential guards “hazard” pay, especially those who working on the frontlines, as referenced in Thinkcurity’s Q&A webinar with security industry experts – COVID-19 Response for Contract Security.

On a side note, New insights on security guard pay and bill rates by the Trackforce Valiant team – a report for the security guard industry – took quantitative, real-world pay and bill rate data from hundreds of security firms across the U.S. to identify common trends and analyzed how companies price their services based on location, type of post, and the size of the firm. Download the report for more information on security guard bill and pay rates.

For benefits to the hourly workforce, one of the more challenging aspects is in offering medical benefits to employees. Let’s look at some of the challenges around benefits management.

Ensuring Benefits Offered Are Maintained for Your Workforce

For business with over 50 Full Time Employees (FTE), the Affordable Care Act (ACA) requires that you offer medical benefits to your employees and report their eligibility and election status to the IRS (Form 1094 and 1095). Medical benefits are costly for employers to provide and a large number of employees do not participate in a benefits management program. According to a recent report from the Bureau of Labor Statistics (BLS) only 30% of employees in the Security Guard sector actually participate in their companies medical benefits program.

Recognizing that statistic, it’s not uncommon for many smaller employers to attempt to forego offering benefits.  However, this is a violation of the ACA and can carry some significant fines.  Here are just some of the fines that can be handed down:

  1. $200 billion in projected penalties
  2. $3,000 in health insurance penalties
  3. $250 per non-filing penalty
  4. $1,000 in failing to report
  5. Double penalties for willful negiligence
benefits penalties chart for noncompliance to federal regulations for employees

So, even though there is a low participation rate and the employers costs are high, failure to offer medical benefits in the coming months when onboarding more employees to your workforce can become a compliance challenge for many companies.

Solving the Challenge of Benefit Costs for Hourly Workers

The real challenge becomes when you are looking to provide medical benefits to your workforce, you want to get the best of both worlds – a good benefits package that helps you scale with your business as much as possible during this new normal but that is also cost-effective. There are a few types of benefit options that you can implement for your business:

  • Major Medical Plans:These are the traditional plans you would see for most FTE.  They are typical of any major medical benefit providers, and come with higher premiums, but more benefits.
  • Minimum Essential Coverage (MEC):Becoming more popular in hourly workforce management operations is the MEC plan.  These are much lower premiums and provide exactly what they state – minimum essential coverage – for employees.  These are highly deductible plans that help to offset the premiums, with the expectation that they are not leveraging as much services.
  • Commuter and FSA Benefits:Another added plan is the commuter benefits and FSA.  These are plans that take money out of the employee’s paycheck pre-tax and deposit onto a card for use in commuting and flexible spending on medical needs. While not part of the ACA, these can offset some of the cost when combined with an MEC plan.

Spreading the Cost of Benefits Through a Diverse Portfolio

Another way in which companies can create a benefits management program that is both valuable and cost-effective is by diversifying multiple plan types. Benefits management software platforms and providers will sometime enable you to pull from multiple plans so that employees can select from more than just one or two packages for their coverage.

In 2018, the majority of companies offered over 8 different health plan options, compared to only offering 3 in 2015. This not only gives the employee more options, but also enables the employer to offset any costs with going with just one plan. Something we can look forward to when facing this new normal.

Properly Managing Your Workforce Benefits

In the end, benefits are a necessary part of running a business and failure to offer benefits will result in fines. However, knowing the different types of plans and how to manage the different coverage options can help you mitigate costs and stay compliant.

If you have any questions about benefits management for your workforce, feel free to contact us.

About the Author

Tim Lozier is the VP of Marketing for Valiant Solutions. He has an extensive background in software technology, and has been involved in the development of leading-edge technologies and strategies for workforce management solutions. Lozier is responsible for fostering the direction of and providing strategic leadership for Trackforce Valiant’s comprehensive platform for security workforce management, with uniquely tailored solutions for the front-line security workforce management and the back-office Time and Labor Management, Payroll Management and Human Resource Management.

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