The U.S. spent a whopping 1.1 trillion dollars in 2020 on contractual services, according to USAspending.gov. Despite this fact, there has been much controversy surrounding what level of compensation and benefits government contracting companies should offer workers. Government contractors often receive higher compensation than government employees that perform the same jobs. However, employees of government contractors do not receive the same benefits.
In a highly volatile job market, government contracting companies are under extreme pressure to offer competitive salaries and benefits to attract and retain top talent. Today’s workforce is expected to receive more and better employee benefits. Here is a look at some of the most popular government contractor employee benefits trends in 2022.
Health insurance is the most sought-after employee benefit among government contractors. Thanks to the Affordable Care Act (ACA) introduction in 2010, many businesses are now required to provide health insurance to employees or face costly penalties. A key provision of the law states that employers with at least 50 employees or full-time equivalent (FTE) workers must offer health coverage.
With many workers still dealing with the effects of the COVID-19 pandemic, long-term care insurance is expected to play a bigger role in employee health care packages in 2022. Long-term care insurance typically provides services that are not covered under a typical health insurance plan, such as assistance with routine daily activities. This benefit helps cover the costs if a person develops a chronic condition or disability.
Wellness programs have become a common addition or alternative to employer-sponsored health insurance plans. A wellness program promotes better health and acts as a preventive measure to help workers avoid illness. Wellness programs may include a variety of health-related perks, such as gym memberships. Benefits may also be related to stress management, weight loss, medical screenings or smoking cessation.
Some wellness programs also extend further, offering employees educational resources. Regular workshops, seminars or meetings with a wellness coach or healthcare professional can teach employees how best to avoid injury and disease. An effective wellness program can not only improve worker health but also reduce employee absence in the workplace.
Short-term and long-term disability insurance is becoming more common in government contractor employee benefits packages. Disability insurance protects an employee’s greatest asset – their income. This type of insurance replaces a portion of an employee’s monthly income if they should suffer an illness or injury that prevents them from working.
A short-term disability insurance policy provides benefits payments across an expressed number of weeks. Most short-term policies have a maximum number of weeks that a disability can last to fit the criteria, usually 13, 26, or 52 weeks. A long-term disability insurance benefit will pick up where the short-term policy left off, covering employees who are unable to work for a longer period of time.
Family and Medical Leave
COVID-19 changed how many government contracting companies approach caregiver leave benefits. In response to this major health crisis, employees across the U.S. needed paid time off to deal with their own health needs and the health needs of their loved ones. These growing needs are expected to remain in 2022 with the Paid Family Leave Act providing paid sick days, paid caregiving leave and paid medical leave.
The Family and Medical Leave Act (FMLA) provides eligible employees with up to 12 weeks of unpaid, job-protected leave each year. Coverage is awarded to staff in a number of circumstances, such as during the birth of a newborn child of an employee, placement of a child for adoption or foster care with an employee, care for an immediate family member with a serious illness or when an employee is unable to work due to a serious health condition.
Life insurance pays a sum of money to the loved ones of an employee when they die. This money can be used to help replace lost income or pay off debts. Life insurance has quickly become a must-have employee benefit as more employees better understand the importance of having coverage. A life insurance policy pays out regardless if the death resulted from an illness, accident or natural causes.
There are two main types of life insurance: term life insurance and permanent life insurance. Term life insurance is where the policyholder chooses the length of coverage, such as 10, 15 or 20 years. If the person dies within that term, the beneficiary receives the death benefit. Permanent life insurance, which includes whole life insurance and universal life insurance, provides a death benefit no matter when the person dies.
Tuition reimbursement has become more common in recent years as more employers recognize the value of helping their employees enhance their education. Government contracting companies that choose to offer tuition reimbursement pay a set amount or percentage of an employee’s tuition or other educational expenses for a study program or degree.
With this type of arrangement, the employee is typically required to pay for all of their educational expenses at first. At the end of the course or semester, the employee can submit a form to the company to get reimbursed. Courses or degree programs must meet certain company requirements before reimbursement can be made. For example, some companies will only reimburse employees for courses that relate to their line of work.
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Government contracting companies have the tough job of building a satisfactory compensation and benefits package that will keep them competitive. Offering the right combination of benefits to employees is essential to ensure that workers know that the company is invested in their health and future. When paired with an attractive salary, a competitive benefits package can make a government contractor stand out in the industry.
If you want to know more about what employee benefits a government contractor should offer to workers or what trends to expect in 2022, the experienced employee benefits consultants at the Business Benefits Group can help. Contact BBG online today to learn more about our consulting services or to schedule a consultation.