⚡ Get All Content for 20% Off ⚡

4 Alternatives to Offering Paid Healthcare Benefits Boosting pay and offering more attractive alternative benefits could help companies deal with ever-rising health insurance premiums.

By Matt Straz

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

The cost for companies to provide healthcare benefits is at an all-time high, according to a new Towers Watson report. In 2014, healthcare costs reached an average of $9,560 per employee, and that's just the employer's share.

The Affordable Healthcare Act mandates that companies with 50 or more full-time employees provide health coverage. However, small businesses and startups don't have to take the same route.

Related: The Real Power of Health Insurance

Though this new law might make healthcare more expensive to employers, Healthcare.gov does provide many affordable options for individual and family plans. For example, if an employer does not offer coverage, the individual may be eligible for a tax credit.

Since the Affordable Healthcare Act is giving consumers more control over their own healthcare, offering healthcare as a benefit might not be as attractive as it once was. In place of providing healthcare as a benefit, consider providing these benefits instead:

1. Pay enough to help cover costs of personal plans

Though healthcare costs are rising for employers, it doesn't necessarily mean employees will have the same experience with a personal or family plan. Instead of taking out plans for the whole company, give everyone a boost in salary or an annual bonus to help cover the cost of employees' personal insurance plans.

2. Opportunities to work remotely

We're entering an age where the workforce is starting to get picky. Why? It's increasingly being flooded by millennials who grew up alongside the Internet, mobile technology and access to any information on demand from virtually anywhere. Not surprising, but the younger workforce actually cares more about freedom in the workplace than other benefits renowned by Baby Boomers, including healthcare.

A 2013 study by PwC, the University of Southern California, and the London Business School found flexibility in where and how much millennials work has a big impact on job satisfaction. To remedy this, more companies are offering the option for employees to work remotely either part-time or full-time.

A 2013 WorldatWork survey reports that telework is now offered by 88 percent of organizations. One-third of organizations offer telework on a full-time basis. This allows 54 percent of organizations to offer a more flexible schedule to employees.

Instead of healthcare, consider offering employees the option to work from home once a week, or one week per month, depending on the schedule that tasks demand. Employees, especially millennials, will have more freedom that seems more important than health insurance coming from an employer.

Related: How to Attract -- And Retain -- Staff When You Can't Pay Big Bucks

3. More flex/vacation time

Instead of offering healthcare to supplement the medical expenses that may be incurred due to workplace stress, treat the source. Play a part in helping reduce workplace stress so employees will be healthier in the first place.

A 2013 study published by the Canadian Center of Science and Education found that offering employees flexible work hours not only reduced stress and absenteeism, but also improved morale and motivation. When employees have the freedom to balance work and home life, overall well-being is improved. A healthy well-being means less frequent illnesses and, therefore, less frequent doctor visits and medications to subdue the harmful effects stress from work has on the body.

4. Creative perks to inspire innovation

By 2025, 75 percent of the workforce will be made up of millennials. Companies are going to have to make a few adjustments to ensure employee retention. Along with offering more freedom and autonomy in the workplace, companies will need to be creative to hold millennial interest. In fact, a Deloitte study reveals 78 percent of millennials are influenced by how innovative a company is when deciding where to work.

To millennials, healthcare now pales in comparison to perks like catered meals, attraction tickets, and even fun workplace environments like the ones offered by Apple, Google and other companies known for innovation.

While it might not be realistic to open a cafe in the office building, try filling the break room with snacks and refreshments. Once a month, organize a catered office lunch. Employers in the service industry can build relationships with entertainment companies such as theme parks and movie theaters to see if service trades are an option.

It's possible that, in the next 10 years, offering healthcare as a benefit may be irrelevant given the new freedom individuals have with adopting personal healthcare plans. Just as the workforce is changing, companies should adapt and be aware of the benefits that might be more pertinent to employees.

Related: Putting a Price Tag on Employee Fitness

Matt Straz

Founder and CEO of Namely

Matt Straz is the founder and CEO of Namely, the HR and payroll platform for the world's most exciting companies.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Business News

Costco CFO Reveals Uncertain Fate of $1.50 Hot Dog and Soda Combo

CFO Richard Galanti reveals that the price will stay the same — but only "for a while."

Business News

The Most Unexpectedly Popular Side Hustle of the Decade Has Low Startup Costs and High Markups

A new report shows that vending machines are a popular investment — and the industry is set to grow up to $3 billion by 2031.

Marketing

Ever Wonder Why Certain Websites Rank Higher Than Yours? This SEO Expert Reveals The Secret to Dominating Search Results

It's often the smart use of SEO, now supercharged with AI, particularly in keyword optimization.

Business News

AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

The researcher said in the report that freelance jobs were analyzed first because that market will likely see AI's immediate impact.

Leadership

Former Interrogator Shares 5 Behaviors Liars Exhibit and How to Handle Them

Five deceptive behaviors to look for and how to respond to those behaviors when you encounter them.