Foundational

Income Protection & Disability

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Key Features – How Does It Work?

The US has a government-sponsored Social Security Disability Insurance programme. Eligibility for these benefits has a high threshold, requiring both a minimum contribution level and a disability which is expected to last at least one year or result in death. It does not cover employees who are out of work for a short period. This payment may be supplemented by Supplemental Security Income, a means-tested programme for low-income individuals. For effective income protection, most people use the private market.

On the private market, employers may choose to fund group income protection insurance for their employees. In this case, when an employee becomes ill or suffers an injury, the cover provides them with a portion of their salary for the period they are unable to work. The cover usually begins following a predetermined “deferred period”, which can range from a few weeks to several months, and continues until the employee is able to return to work, reaches the policy’s maximum benefit term, or retires. The insurance provider may also offer rehabilitation and support services to help the employee return to work sooner.

Employers may offer short- or long-term plans. Short-term plans are designed to cover a few weeks or months until an employee can return to work. This tends to be paid at a higher coverage rate. Long-term continues until the employee is able to return to work, reaches the policy’s maximum benefit term, or retires.

Some states require employers to provide short-term disability coverage as an extension of workers’ compensation laws. These include California, Hawaii, New Jersey, New York, and Rhode Island. California, Hawaii, New Jersey, and New York allow private plans as an alternative to the state system if they meet or exceed the state benefits.

Cost and Funding

For private plans, premiums are normally paid monthly. The cost will depend on the size and risk profile of the workforce, the level of cover chosen, and the length of the deferred period.

Taxation

Either the disability premium or any insurance payment received is subject to taxation, depending on who pays the premium and how it is paid. If the employer pays the premium, it is not considered taxable income for the employee, but any payments from the insurance will be taxable. If the employee pays the premium from their gross pay (pre-tax), any payments from the insurance will be taxable. If the employee pays the premium from their net pay (after-tax), any payments from the insurance would not be taxable.

Implementation and Administration

To implement income protection insurance, employers should select an insurance provider and agree on policy terms, including the level of coverage and deferred period.

Employers should communicate with their employees the option for joining the insurance and how the premiums are funded. There should be an internal process for managing enrolment and communicating with the insurer. When a claim is made, this is processed and paid by the insurer.

Other Considerations

Employers should consider how income protection insurance integrates with other employee benefits such as private health insurance and an Employee Assistance Programme (upon the employee’s return to work). Employees should also be made aware that the insurance expires when they leave the company.

Employers in states with compulsory temporary disability payments should ensure their private offering exceeds the state minimum to qualify for an exemption.

Life Insurance

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Key Features - how does it work?

In the event of an employee’s death, the policy provides a lump sum benefit to the designated beneficiaries. This amount is either based on a multiple of the employee’s salary or an agreed fixed sum.

Cost and Funding

A group policy is organised by the employer, who is responsible for paying the premiums. This is normally done monthly. Some employers will cover the entire cost of the premium while others will split the cost between employee and employer, on an opt-in basis. The cost of life insurance depends on the size and risk profile of the workforce and the level of cover chosen. As life insurance policies cover entire groups of employees, the cost per person is usually lower than individual income protection policies.

Taxation

Premiums paid by the employer for an employee’s life insurance policy are exempt from income tax up to a coverage amount of $50,000. Above this amount, the value of the coverage will be considered imputed income for the employee and taxable. The IRS has rules for calculating the imputed value which is based on employee age and insurance amount. If the premiums are paid by the employee, this tends to come from net pay (after-tax).

Any amount that is received by beneficiaries under a life insurance contract is not taxable with no maximum limit. There may be tax implications if the beneficiary is the deceased’s estate.

Implementation and Administration

To implement a life insurance policy, employers should select an insurance provider and agree on policy terms, including the level of coverage.

Employers should communicate with their employees the option for joining the insurance and how the premiums are funded. There should be an internal process for managing enrolment, including monitoring changes related to salary and newly onboarded staff, and communicating with the insurer. When a claim is made, this is processed and paid by the insurer.

Other Considerations

When offering life insurance, employers should consider how it integrates with other employee benefits. It is important to communicate the details of the policy to employees, including what the policy covers and how to designate beneficiaries. Employees should also be made aware that the insurance expires when they leave the company. Employers should also review any additional benefits, such as access to bereavement support or legal advice, which some insurers may offer as part of a package.

Private Health Insurance

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Key Features – How Does It Work?

With limited public health options in the US, and means-tested access to public insurance, private healthcare is increasingly considered a necessity and offering comprehensive private health insurance has become one of the most important parts of an employment package.

The government programmes of Medicaid and Medicare offer some coverage. Medicaid is designed for low-income individuals and is means-tested. A large percentage of Medicaid recipients are children. Medicare is available to people over the age of 65 or younger people with disabilities and is less likely to provide coverage for active employees.

Private health policies provide coverage for various medical treatments, including consultations, diagnostics, surgery, aftercare, and medication. The market for private health insurance is well developed and policies vary significantly, from basic plans which cover essential health benefits such as primary care appointments through to comprehensive plans which cover elective surgeries and mental health. There are federal statutory requirements about some types of care that must be covered, including coverage for pre-existing conditions (if within scope). In the US, most insurers operate on a network-based plan. This means that employees can access services from a specific list of providers. Most policies require a co-pay from the patient, out-of-pocket deductibles before the insurance covers costs, and waiting periods before covering specific services. In the US, it is common for the insurance to extend to family members.

Employers that have more than 50 full-time employees are subject to a penalty if they do not offer health insurance to their employees that is considered affordable and provides minimum value. The penalty is often more than the cost of providing health insurance, incentivising large companies to provide cover to their employees.

Health insurance is complemented by Health Reimbursement Arrangements (HRAs) and Flexible Spending Accounts (FSAs).

HRAs are tax-advantaged employer-funded accounts that reimburse employees for medical expenses. This helps employees cover healthcare costs, minimising co-pays and deductibles. Some employers may use these accounts to allow employees to choose their own insurance and reimburse the premiums. HRAs are funded solely by employers, with no employee contributions allowed. Employers set eligible expenses and the allowance limit. Employees then submit receipts and proof of expenses, and employers action the reimbursement. This process is increasingly improved by technology and automation.

FSAs are tax-advantaged employer-sponsored arrangements that allow employees to set aside funds to pay for medical expenses. This helps employees cover healthcare costs not covered by insurance, such as co-pays and deductibles. Employees decide at the beginning of the year how much they want to contribute based on anticipated medical expenses and this amount is then deducted from the employee’s pay. To use the account, employees submit receipts for reimbursement or, increasingly, use a debit card which gives employees immediate access to their funds. There are strict rules about rollover amounts which encourage employees to use the funds within the year.

Cost and Funding

Premiums are paid by the employer, normally on a monthly basis. The cost of the insurance depends on the size and risk profile of the workforce (including age, health, and geography), the level of cover chosen, and whether dependants are included in the policy. In most cases, the employee pays a small percentage of the premium for themselves (average between 15 - 20%) and their dependants (average between 25 - 35%).

Health insurance premiums in the US are higher than in most countries and are rapidly increasing. Offering health insurance as an employee benefit tends to result in a lower salary to adjust for this.

Taxation

Gross income of an employee does not include employer-provided health plan coverage.

If the employee contributes to the premium, the payment will be made post-tax unless it is done through a cafeteria plan. Benefits from the coverage are typically tax-free.

Implementation and Administration

Employers should choose an insurance provider based on their employee needs. They should decide how the cost will be shared between employees and the employer. HR should manage enrolment, including the process for adding dependants. Once set up, employees normally interact directly with the insurance provider. Most providers will have an online portal where employees can check their coverage, track claims, and access information about health care providers.

Other Considerations

Expenses for health care incurred outside the network system can result in high fees. It is important to have clear information on what is covered and which health care facilities are available to employees.

Employees are covered for the time that they are employed. COBRA regulations allow individuals who lose employer-sponsored health benefits to continue coverage at their own expense.

Most providers only allow changes to health insurance during an open enrolment period. Employers should clearly communicate the options and deadlines to employees.

Retirement Funds

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Key Features – How Does It Work

The US has a government-sponsored Social Security programme. Payments are available to all employees who are 62 or older and have worked and paid social security taxes for 10 years or more. Workers who wait until they are 70 to collect their benefits will receive higher monthly payments. The amount varies based on the average earnings across the employee’s career. Social Security does not replace pre-retirement income and the average employee will need additional income to maintain their standard of living.

The most common employer-sponsored retirement planning is a 401(k), which derives its name from the relevant section in the Internal Revenue Code. These accounts allow employees to contribute a portion of their salary to a savings fund designed for retirement. In many cases, employers offer a matching programme. 401(k) accounts are maintained by the employer through a fund managed by a third party. Employees typically have the option to decide how their contributions are invested. 401(k)s are defined contribution schemes which means there is no guarantee of return on investment.

The other option for employees is an Individual Retirement Account (IRA). Per the title, this is an account opened and maintained by an individual, separate from their status as an employee. While it exists separate from employee benefits, some companies will choose to offer IRA deductions via payroll to help employees invest.

The federal government recently introduced an auto-enrolment mandate for 401(k) and 403(b) plans. Retirement plans established after 29 December 2022 must automatically enrol eligible employees from the start of 2025, with default contribution set between 3% and 10% and increasing on an annual basis.

Some states require employers without a 401(k) (or similar retirement plans) to enrol employees in state-sponsored IRAs.

Cost and Funding

Employees can typically choose the amount which they contribute to their 401(k). Employers commonly offer a matching programme (with a maximum amount). These contributions are part of the employer’s normal payroll processes and accounting. Contributions have an annual cap, with a higher catch-up contribution allowed for people over 50.

401(k) providers often charge management and administrative fees to the employee directly via the fund.

Taxation

The tax treatment is different between a traditional 401(k) and a Roth 401(k). In the case of the former, contributions to the account are made pre-tax and distributions are then taxable. In the case of the latter, the opposite applies, where contributions to the account made after-tax and distributions are tax-free. Not all employers offer both account types, and if only one is available, it is typically a traditional 401(k).

If the 401(k) is withdrawn early, there is a 10% penalty on the withdrawal which is applied in addition to income tax.

Implementation and Administration

Employers choose a 401(k) fund provider and decide the employer contribution amount. Once set up, HR or payroll within a company typically manage enrolment and internal communication, including automatic deductions.

Some companies have auto-enrolment in an effort to increase participation among employees. Any plans established on or after 29 December 2022 have compulsory auto-enrolment from the beginning of 2025. This applies to companies with more than 10 employees or which have been operating for more than three years. If operating an auto-enrolment, the minimum employer contribution is 3%. When operating on auto-enrolment, there should be a clear process for employees to opt-out.

A 401(k) can be accessed without penalty from the age of 59½.

Other Considerations

When an employee leaves a company, they can choose to keep the funds in the 401(k), transfer it to their new employer (if they offer a 401(k)), or move it to an IRA.

Family

Assisted Reproduction

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Key Features – How Does It Work?

Assisted reproduction typically includes coverage or reimbursement for fertility treatments and related consultations. Employers may also offer emotional support, such as counselling or fertility coaching to help employees navigate the physical and emotional challenges of fertility treatments. This may be complemented by leave policies which support employees in accessing services.

Whether assisted reproduction is covered under a health insurance plan will depend on local state laws and the policy chosen by the employer. Health insurance policies may be complemented by the use of Health Reimbursement Arrangements (HRAs), or some employers choose to partner directly with specialised providers.

Cost and Funding

The cost of employer-supported assisted reproduction varies depending on the scope of the benefit and the level of coverage provided, as well as the format of the offering. Some employers may choose to cover a set number of fertility cycles, while others may offer reimbursement up to a certain limit. Employers can choose to fully fund the benefit, share the cost with employees, or offer it as a voluntary benefit with employees covering the cost of treatment themselves.

Taxation

Whether an assisted reproduction benefit is taxable depends on whether it is classified as a medical expense. Expenses that are not considered medical should be included as an employee income and are subject to tax.

Implementation and Administration

Employers should first consider whether assisted reproduction treatment can be included as part of health insurance. In some states, this is required. When partnering with a fertility provider, employers should consider a wide scope of needs, such as the covered treatments and additional support. HR teams should clearly communicate the benefit to employees, including eligibility criteria, covered treatments, and how to access the benefit. Many third-party providers now offer an online platform and app to manage their offering.

Other Considerations

When offering assisted reproduction support, employers should ensure the benefit is inclusive and accessible to all employees. This includes same-sex couples, single parents, and individuals pursuing fertility treatments alone. Employers should consider providing emotional support resources, such as counselling or access to fertility networks, as fertility treatments can be emotionally and physically taxing.

Carer's Support

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Key Features – How Does It Work?

Carer’s support can range from general policies like additional paid leave and wellbeing programmes to more tailored options like caregiving platforms and direct assistance. This might involve partnering with third-party platforms that offer information, strategies, and guidance on caregiving, including help with applying for government payments. Employers can also collaborate with providers that offer care services, allowing employees to access discounts. Many platforms also provide one-on-one support, and employers and employees should make use of free resources through non-profits like the AARP.

Employers may also choose to offer Dependent Care FSAs. FSAs are tax-advantaged employer-sponsored arrangements that allow employees to set aside funds to pay for dependent care expenses. Employees decide at the beginning of the year how much they want to contribute based on anticipated expenses and this amount is then deducted from the employee’s pay. To use the account, employees submit receipts for reimbursement. There are strict rules about spending the amounts with any unused funds forfeited at the end of the plan year.

Cost and Funding

The cost of providing carer’s support will depend on the type and extent of support the employer chooses to offer. Support through signposting and free resources is minimal to no cost. If employers choose a partner service, the cost will depend on the level of access and scope of cover, ranging from an online platform through to one-on-one support. These group offerings tend to be more cost-effective than direct subsidies.

Taxation

If paid for and provided by an employer, a work-life referral programme which offers logistical support is considered a de minimis fringe benefit and the cost is not included in an employee’s gross income. If there is one-on-one support or direct caring services, this is likely to be considered imputed income and subject to tax.

Implementation and Administration

The most effective way to implement carer’s support is to partner with a caregiving service provider. Employers should choose a partner based on the needs of their workforce and available budget. Employers should clearly communicate the available support options to employees. Administration is usually managed directly through an online portal where employees can access resources and book available support services.

Other Considerations

Employers should consider how carer’s support integrates with other policies, such as leave and flexible working, as well as mental health and wellbeing initiatives.

Childcare Support

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Key Features – How Does It Work?

Employers must choose the best childcare support for their business. For larger companies, this may be building an on-site childcare which is run internally or through a provider. For smaller companies, it may be more cost-efficient to offer reimbursement for daycare or equivalent fees. Companies may also choose to partner with local providers to reserve spots for employees at a conveniently located daycare centre.

Employers may also choose to offer Dependent Care FSAs. FSAs are tax-advantaged employer-sponsored arrangements that allow employees to set aside funds to pay for dependent care expenses. This includes daycare, before or after school programmes, and summer camps, and covers children up to the age of 13. Employees decide at the beginning of the year how much they want to contribute based on anticipated expenses and this amount is then deducted from the employee’s pay. To use the account, employees submit receipts for reimbursement. There are strict rules about spending the amounts with any unused funds forfeited at the end of the plan year.

Cost and Funding

The cost of childcare support will vary based on the type of benefit provided and whether the employer chooses to offer full or partial funding. For on-site solutions, the employer bears the cost of setting up and maintaining the facility, while establishing partnerships or operating with subsidies offer a cheaper alternative.

Taxation

Childcare assistance paid by the employer is exempt from income tax up to $5,000. Above this amount, the value of the coverage will be considered imputed income for the employee and taxable. If the premiums are paid by the employee, this tends to come from net pay (after-tax).

There are tax benefits to the employer for providing childcare services.

Implementation and Administration

Employers should choose an approach based on the needs of their workforce and available budget. Employers should clearly communicate the available support options to employees, including when onboarding new staff. If offering subsidies, HR and payroll teams will be involved in managing this process.

Other Considerations

Employers should ensure they are complying with local regulations related to childcare.

Emergency Carer's Support

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Key Features – How Does It Work?

Employers partner with a provider that offers a back-up care programme. Employees who have caring responsibilities should register with the provider. When an employee needs emergency care, they can organise care directly through the provider. This may include centre-based care and in-home care.

Cost and Funding

Employers can decide to fully fund the service (often with a set number of days per year), provide partial subsidies, or require employees to cover the cost. In most cases, offering the benefit at a group level is more cost-effective than individual arrangements.

If the company offers a Dependent Care FSA, this could be used to fund the employee portion of care.

Taxation

Childcare assistance paid by the employer is exempt from income tax up to $5,000. Above this amount, the value of the coverage will be considered imputed income for the employee and taxable. If the premiums are paid by the employee, this tends to come from net pay (after-tax).

Implementation and Administration

Employers should have a clear policy on how back-up care operates, including if there are options for remote working while receiving the care. Administration is normally managed through an online portal where employees can access resources and book caregiving services. Employers should clearly communicate the available support options to employees and manage enrolment or reimbursement processes.

Other Considerations

Employers should consider the accessibility and availability of the service to ensure it meets the needs of their workforce, including those in remote or less-served locations, and accommodating caregiving needs, such as caring for adults or individuals with special needs. Employers should also manage the risk of service gaps during high-demand periods such as holiday periods.

Pet Insurance

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Key Features – How Does It Work?

Pet insurance covers vet bills and medical treatments for pets. Most cover includes accidents, emergencies, and surprise illnesses, which can incur significant expenses. Some packages offer optional additional cover for wellness and preventative care, such as yearly exams and vaccinations. There tends to be an age maximum of the pet at the time of application, but cover then lasts for the duration of the pet’s life.

In most cases, pet insurance works on a reimbursement model. This gives flexibility for employees to choose a veterinarian.

Cost and Funding

The funding model will be decided by the employer. In most cases, premiums for pet insurance are paid by the employee. Employers may choose to subsidise the premium.

Many insurances will include a deductible amount, and a reimbursement plan that only covers a percentage of the submitted bill. This means the pet owner will still be required to pay some costs.

Taxation

If the premiums are paid by the employee, this tends to come from net pay (after-tax). If the employer makes a contribution, the value of the premium will be considered imputed income for the employee and taxable.

Implementation and Administration

Employers should choose a partner and negotiate group terms for the pet insurance. HR teams should handle the initial communication with employees, ensuring they understand the coverage options and how to sign up. Once enrolled, employees engage directly with the partner provider. Most pet insurance providers offer online platforms where employees can manage their policies, submit claims, and track reimbursements.

Many partners are designed to integrate with payroll systems so that premiums can be easily paid from the employee’s salary.

Other Considerations

Employers should choose a provider that covers a wide range of pets. It is important to inform employees of the cost of the insurance, including possible deductible and co-pay costs, and how it will be taken from their salary.

Spouse & Partner Critical Illness Cover

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Key Features – How Does It Work?

Employers in the US commonly extend their insurance offering to the spouses and dependants of their employees. It is common for this to be voluntary and at an additional cost, where employees are given an option at the point of enrolment, or covered by the employer at a lower coverage (e.g., 50% of what is covered for the employee). When employees enrol through the company’s policy, they are given an option for the cover to extend to their spouse. What is covered and excluded tends to correlate to the employee’s policy.

Cost and Funding

The cost will depend on factors such as the coverage amount and the age and health of the spouse. If the employer chooses to offer a lower cover than that for the employee, then the premiums will also be lower. The use of the group policy makes it more affordable than individual policies.

Taxation

Tax would operate similarly to critical illness cover for the employee. If the premiums are paid by the employee, this tends to come from net pay (after-tax). If the employer pays a contribution, the value of the premium will be considered imputed income for the employee and taxable.

The tax on the payout will depend on the tax treatment of the premiums. If the premiums are taxed, the payout will be tax-free.

Implementation and Administration

Spouse and partner cover is an extension of critical illness insurance. Employers should choose an insurance provider that offers group critical illness policies which include . In some cases, this may be offered as an add-on to life insurance policies. HR teams are responsible for managing employee enrolment and communicating the details of the policy to employees. Employees are typically able to select their desired coverage level and associated premiums. Administration is usually managed via an online portal where employees can access policy information and manage claims. Payouts are processed by the provider.

Other Considerations

Employees should be made aware that the coverage is likely less for spouses than the employee and plan accordingly. Some insurances will have rules around severity of the injury before payment, or offer partial payments for less severe conditions. Communication around the benefit during life events such as marriage or having children can help with employee engagement with the programme.

Spouse & Partner Life Insurance

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Key Features – How Does It Work?

In the US, spouse and partner life insurance is typically offered as an optional addition through employer group life insurance plans. Employees can choose to extend their coverage to include their spouse. The cost of this insurance is generally lower than purchasing an individual policy. Coverage amounts for spouses are usually set at a percentage of the employee’s policy or a fixed dollar limit which is lower than the primary insurance. Enrolment generally occurs when joining a company or during open enrolment periods.

Cost and Funding

The cost of the insurance depends on factors such as age, health status, and the chosen coverage amount. Some employers may offer subsidised premiums as part of their benefits package, but coverage is usually voluntary and employee-funded through payroll deductions.

Taxation

Life insurance premiums paid by the employer for the spouse or dependent of an employee are considered a de minimis fringe benefit and exempt from income tax up to a coverage amount of $2,000. Above this amount, the value of the coverage will be considered imputed income for the employee and taxable. If the premiums are paid by the employee, this tends to come from net pay (after-tax).

Implementation and Administration

Spouse and partner life insurance is administered through an employer’s group life insurance plan. HR departments handle enrolment, manage communications, and provide employees with the necessary forms or online portals to select or update their coverage. Employees may need to provide basic information about their spouse, such as age and health details, during the enrolment process.

Other Considerations

Employers should choose a plan that is inclusive and extends to partners as well as spouses. Employers should communicate the details of the policy to employees, including what the policy covers and how to designate beneficiaries. This includes any limitations on the spouse and partner offering compared to the primary holding.

Finance

Critical Illness Cover

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Key Features – How Does It Work?

Critical illness insurance provides cover for an employee when they are diagnosed with a serious medical condition. The insurance will normally include a specific list of covered conditions, and typically includes cancer, heart disease, major organ failure, and neurological disorders. When an employee is diagnosed with a covered condition, the policy provides a single lump-sum payment. Policies typically have a survival period of between 10 to 14 days that the policyholder must survive after diagnosis before a claim can be made. Once submitted, the turnaround for this payment tends to be faster than traditional disability insurance policies.

Cost and Funding

The cost of a group policy will depend on factors such as the age of employees, the coverage amount, and the breadth of the conditions covered by the policy. Employers can choose to fully fund the premium, split the cost between employee and employer, or offer it as a voluntary benefit funded by the employee.

Taxation

If the premiums are paid by the employee, this tends to come from net pay (after-tax). If the employer makes a contribution, the value of the premium will be considered imputed income for the employee and taxable.

The tax on the payout will depend on the tax treatment of the premiums. If the premiums are taxed, the payout will be tax-free.

Implementation and Administration

Employers should partner with an insurance provider that offers group critical illness policies. In some cases, this may be offered as an add-on to life insurance policies. HR teams are responsible for managing employee enrolment and communicating the details of the policy to employees. Employees are typically able to select their desired coverage level and associated premiums. Administration is usually managed via an online portal where employees can access policy information and manage claims. Payouts are processed by the provider.

Other Considerations

Some insurances will have rules around severity of the injury before payment, or offer partial payments for less severe conditions.

Earned Wage Access

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Key Features – How Does It Work?

Earned wage access, also known as on-demand pay or earned wage access, usually operates through employer-partnered platforms. Employees are given access to visibility of the wages they have earned in a pay period and can choose to receive these before regular payroll. Companies offer different payout methods, including to a pre-paid bank card, via Venmo, or a bank deposit. Employers can set a maximum withdrawal amount, either tied to a dollar amount or a percentage of wage, and limit the frequency of withdrawal.

Cost and Funding

There is little to no cost for an employer to partner with an earned wage access platform. Instead, providers tend to charge a small per transaction fee that is passed onto the employee.

Taxation

Earned wage access is pay that is already earned by the employee and taxes are treated the same way. Employers are still required to withhold income tax. Depending on how this process is organised, it may mean that the advance is paid without deductions and these are taken at the time of the payroll date. Employers should ensure they are appropriately tracking tax payments to avoid additional payments for the employees.

Implementation and Administration

Employers should choose an earned wage access partner that can appropriately integrate with existing payroll systems, and has appropriate in-built limits. Once in place, the provider tends to handle all administration and the employee can operate using an app.

Other Considerations

Regulations around payment of wages vary by state. Employers should be aware of how earned wage access can impact the provision of other benefits. It is also important to ensure appropriate financial education for employees to ensure that early payments are withdrawn responsibly.

Financial Advice & Coaching

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Key Features – How Does It Work?

The US market on financial advice and coaching is advanced, with lots of employer-focused options. Employers choose a provider which gives their employees access to these options. Most companies provide an online platform that offers budget tracking, financial coaching, and education resources. The provision is increasingly able to be personalised per employee.

Cost and Funding

The cost of a platform will depend on the extent of its offering and many companies offer a tiered pricing model. This includes whether there is capacity for personalisation, and whether one-on-one sessions are offered on a set amount of sessions or unlimited basis. Price is normally calculated per employee per month on a subscription model.

Taxation

Employer-provided financial education is generally considered an educational assistance programme and would be excluded from an employee’s income. If there are add-ons to the service, such as investment advice or tax preparation, then this may be subject to different tax treatment.

Implementation and Administration

Employers should choose a third-party provider which best aligns with their budget and employee needs. It is important to choose a platform which is inclusive and accessible to all employers, including a diversity of options to reflect life stages and goals. Once connected, these platforms handle most of the administration, including delivering content and organising appointments.

Other Considerations

Employers should prioritise privacy and confidentiality when using these platforms. Companies in the financial sector should be aware of potential conflicts of interest. Employers should consider how this offer interacts with other benefits such as 401(k), life insurance, and student loan repayments.

Personal Accident Cover

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Key Features – How Does It Work?

In the US, personal accident cover refers to accidental death and dismemberment policies. It covers injuries sustained from accidents, making it separate from critical illness cover. Personal accident cover can be offered as a standalone policy or as an addition to life insurance. In most cases, employers offer a flexible policy, allowing employees to choose the appropriate level of cover.

Cost and Funding

Personal accident cover is considered an affordable insurance, particularly when added to life insurance cover. The exact cost depends on factors such as the level of coverage, the number of employees enrolled, and the industry risk profile. Employers can choose to fully fund the benefit, share costs with employees, or offer it as a voluntary benefit where employees pay the full premium. Group insurance policies offer employees more cost-effective premiums compared to individual coverage.

Taxation

Personal accident cover is considered similarly to life insurance for tax purposes. This means that premiums paid by the employer are exempt from income tax up to a coverage amount of $50,000. Above this amount, the value of the coverage will be considered imputed income for the employee and taxable. The IRS has rules for calculating the imputed value which is based on employee age and insurance amount. If the premiums are paid by the employee, this tends to come from net pay (after-tax).

Implementation and Administration

To implement personal accident insurance, employers should select an insurance provider and decide on funding arrangements. The enrolment should be managed by the employer with information on relevant enrolment periods and deadlines. Administration is usually managed by the insurer, including processing claims. Most insurers provide online portals for management and reporting.

Other Considerations

Employers should consider the demographic and risk profile of their workforce when selecting coverage options. They should also consider how personal accident cover complements existing benefits such as health insurance, disability coverage, and life insurance. It is important to review state regulations, as some states may have specific requirements for accident insurance policies.

Student Loan Repayment

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Key Features – How Does It Work?

Student loan repayment is an increasingly important offer in the US with over $1.5 trillion of student debt in the economy. Employers can choose to offer loan repayments through their own payroll or partner with a provider that organises repayments. In the former case, the employer tends to make the repayment directly to the loan provider. Using a platform provider has additional benefits such as allowing employees to track the contributions against their loan.

Employers can choose to either contribute a set amount for loan repayment or offer a matching programme, where they repay at the same rate as the employee's contributions. Employers can also ask for a specific work commitment in exchange for the loan assistance, such as a five-year service term.

Some employers are now offering retirement matching rather than loan repayment. This means for contributions that the employee makes to repay their student loan, the equivalent amount is paid into the employee’s retirement fund.

Cost and Funding

Employers ultimately decide the cost of the programme based on their budget and programme design, and whether they partner with a provider. Some companies may offer a set contribution, while others may operate a tiered model or matching programme. Small amounts like $50 or $100 can still make an impact for an employee.

Taxation

Employers can pay up to $5,250 toward student loans per year, per employee, that is not considered income and will not be subject to tax. Any amount above this is considered income for the employee. This law is due to expire on 31 December 2025.

Implementation and Administration

Employers should choose their preferred approach and set internal policies on eligibility. For ease of use, employers should choose a provider which integrates with existing payroll and HR systems. They should inform employees of the benefit and help them enrol through the third party.

Other Considerations

Employers should have clear rules on eligibility and repayment process. They should ensure they are informed about any legislative changes, including extensions or modifications to the current tax advantages.

Will Writing

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Key Features – How Does It Work?

Will writing services typically include access to legal professionals or online platforms that guide employees through drafting a legally binding will. The process normally involves step-by-step instructions and questions that are fed into state-specific templates. In most cases, this service is offered alongside other employee benefits, such as life insurance or EAP.

Cost and Funding

Employers may choose to fully fund the service, provide subsidies to employees, or offer this as a voluntary benefit. Online platforms tend to be more affordable than in-person advice. Employers may negotiate group discounts which would make this benefit more affordable than an individual purchase.

Taxation

Will writing would likely be considered a fringe benefit. This means an employee would need to pay income tax on the employer-funded amount. If the benefit is paid by the employee, this tends to come from net pay (after-tax).

Implementation and Administration

Employers should choose a specialised provider or partner with a local law firm. The employer should communicate the availability and process for accessing the benefit, though enrolment or sessions are organised by the provider.

Other Considerations

In the US, wills and probate are governed at a state level. Employers should make sure that they are offering locally relevant support and advice. Employers should develop communications around life events like buying a house, getting married, or having children to ensure that employees are protected. Offering additional educational resources about the importance of estate planning can help maximise employee engagement with this benefit.

Workplace Loans

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Key Features – How Does It Work?

Employers can offer loans through their own payroll systems or by partnering with a provider. Loan amounts range from $250 to $20,000, with terms ranging from 6 to 48 months, though the amount and term will depend on the specific lender. Employers deduct payments from payroll which ensures timely payments and reduces default risks. Many third party providers also integrate with internal HR systems.

Cost and Funding

If an employer chooses to use a platform, these are usually offered for free to the employer, with fees charged to the employee. These providers typically offer interest rates and fees similar to those in the general market. If an employer finances the loan themselves, the cost is mostly administrative. However, there is an upfront outlay to fund the loan. While this money is eventually repaid, it may temporarily impact an employer’s cash flow and balance sheet.

Taxation

If the loan is offered through a provider, this operates as any ordinary loan, with payroll deductions taken from net pay (after-tax). For loans that are offered through the employer directly, any interest rate that is below the Applicable Federal Rate (AFR) can be considered taxable compensation to the employee. Loans under $10,000 are generally considered a de minimis benefit. If a loan is forgiven by an employer, the amount will be treated as income for the employee and subject to income tax.

Implementation and Administration

Implementing workplace loans requires either partnering with a provider or establishing internal processes for loan application and repayment. HR teams are typically responsible for facilitating employee enrolment, and payroll teams should integrate automatic repayment into their platforms. The employer may establish minimum tenure requirements before employees become eligible for loans.

Other Considerations

Employers should clearly explain how workplace loans operate, including repayment processes and their impact on employees’ regular pay cycles. Employers should consider offering broader financial wellness programs to help employees borrow responsibly. Employers should ensure they are complying with state and federal laws around money lending.

Loan agreements should include a clear process for repayment if an employee leaves their job before the loan is fully repaid. This may involve deducting the outstanding balance from the employee’s final pay check or, if using a third-party provider, continuing repayments via direct debit.

Workplace Savings / Investment

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Key Features – How Does It Work?

In addition to 401(k) plans, employees in the US have a multitude of options for workplace savings. These will differ based on the employer and the state they work within. Here are some examples:

529 Plan. Also known as a qualified tuition programme, 529 Plans are state-based investment accounts which are designed to save for higher education expenses for a beneficiary. These plans are most commonly set up by parents for their children. The funds can be used for education expenses such as tuition, fees, and housing. The tax benefits will depend on the state programme.

Money Purchase Pension Plan. MPPPs are employer-sponsored retirement funds with defined contributions from employers. The employer commits to an amount they will contribute on an annual basis, either as a percentage of salary or a fixed amount. Employees can choose whether to make contributions to the plan.

Deferred Profit-Sharing Plan. DPSPs are a savings plan that is dependent on the success of the company. The employer deposits into an account a share of the company’s profits. This means that, in years where the company does not generate profits, no contributions may be made. Some companies may choose to have vesting plans where employees can only access the account after a certain period of time.

Employee Stock Ownership Plan. ESOPs are a retirement plan that is funded by a company’s shares. Companies buy shares on behalf of employees which are then placed in a trust. The employees then own part of the company that they work for. When leaving or retiring from a company, this investment is paid out.

Individual Retirement Account. IRAs are set up by individuals, separately from employers, and are available to anyone with earned income. This makes IRAs a popular alternative for individuals that do not have access to an employer-sponsored 401(k). The individual makes their own contributions to the account.

Simplified Employee Pension. SEPs are a form of IRA that is set up by the employer. The employer sets up the account for all employees and determines the level of contributions. Employees are not able to contribute to these plans.

Savings Incentive Match Plans for Employees. SIMPLE is available to companies with fewer than 100 employees who do not offer another qualified retirement plan. Employers can make a tax deduction for the contributions that they make. Both employers and employees contribute with specific rules about the matching requirements.

Cost and Funding

The cost and funding of savings schemes vary widely based on the model used. The key factors are the employer contribution, the employee contribution, and the tax benefits.

Taxation

Each plan will have its own contribution limits and tax rules which are subject to change on a regular basis. The overarching rule for tax is that it should be paid either on the contribution or the disbursement. Most plans are not taxed on their growth.

Implementation and Administration

There are complex tax and regulatory rules around savings accounts and employers should seek advice on the best approach for their company. In most cases, employers will need to partner with a third-party administrator to run the fund, which may include government entities at the state level. Ongoing administration includes managing employee enrolments and processing contributions.

Other Considerations

Savings schemes should be complemented by a robust financial wellness programme. Employees should be informed about their options when they leave a company, including the portability of different options.

Health

Dental Insurance

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Key Features – How Does It Work?

Dental insurance plans in the US are typically offered as an addition to private health insurance plans. They provide cover for preventive care, basic procedures, and major procedures, though with coverage at different rates. Similar to health insurance, plans tend to operate with maximums, deductibles, waiting periods, and network restrictions.

Cost and Funding

The cost of this insurance is typically shared between the employer and employee. The cost will vary similarly to health insurance plans, with factors such as level of coverage and risk profile of the group workforce. Employers can negotiate group rates with insurers and may offer Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs) to help employees manage out-of-pocket expenses. Employers should consider if it is cheaper to partner with a specific dental provider or stay with their health insurance provider.

Taxation

The tax treatment for dental insurance is the same as that for a private health insurance plan. This means that employer-provided coverage is not included in an employee’s gross income.

If the employee contributes to the premium, the payment will be made post-tax unless it is done through a cafeteria plan. Benefits or coverage is typically tax-free.

Implementation and Administration

Implementing dental insurance involves selecting a provider and agreeing on policy terms. In most cases, this coverage is often bundled with a health insurance policy, which provides a convenient way for employers to offer the insurance while also making it easy for employees to enrol. Administration is managed through an online portal which is facilitated by the provider, and allows employees to submit claims, track coverage, and access the network of providers. Any claims are processed and paid by the insurer.

Other Considerations

Expenses for dental incurred outside the network system can result in high fees. It is important to have clear information on what is covered and which health care facilities are available to employees.

Employees are covered for the time that they are employed. COBRA regulations allow individuals who lose employer-sponsored health benefits, including dental, to continue coverage at their own expense.

Most providers only allow changes to health insurance during an open enrolment period. Employers should clearly communicate the options and deadlines to employees.

DNA & Epigenetic Profiling

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Key Features – How Does It Work?

DNA and epigenetic profiling as a benefit typically involves partnerships with providers that offer genetic testing kits. Employees can order a testing kit online which is completed at home and returned to the provider. The results are then delivered confidentially directly to the employee. Many companies offer complementary services such as genetic counselling or access to healthcare professionals to interpret and advise on results.

Cost and Funding

Most employers choose to offer DNA testing as a voluntary benefit or through a wellbeing allowance. This means the cost is borne by the employee.

Taxation

The tax treatment will depend on how the benefit is offered. If it is offered as part of a wellness programme or preventive health initiative, DNA testing may be treated as a tax-free fringe benefit for employees. If the employee bears the full cost, this tends to come from net pay (after-tax).

Implementation and Administration

Employers should partner with a third-party provider that handles DNA testing. They should communicate this benefit to employees, including the process for enrolling to receive the testing kits. The employer should be clear on the voluntary nature of any testing programme and relevant privacy protections.

When offering this benefit, employers should take active steps to ensure they comply with the Genetic Information Nondiscrimination Act, which prohibits the use of genetic information in employment decisions or health insurance eligibility.

Other Considerations

Employers should consider how DNA testing integrates with their wider wellness strategy. Offering educational resources on the benefits and limitations of this benefit can help employees make informed decisions about whether to participate.

Fitness Memberships

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Key Features – How Does It Work?

Fitness memberships can take a variety of forms and employers have flexibility to align this benefit with the priorities of their workforce and the benefits budget. This includes digital-only offerings, with classes and resources offered online or via an app, gym memberships via a specific provider or on a network system, and on-site facilities managed internally or by a third-party. Employers will manage enrolment with a fitness provider, and then employees are given access to the fitness membership which is typically managed through an app or other online platform.

Cost and Funding

With a wide range of options available, there are solutions to fit most benefits budgets. Employers can choose to cover the cost, offer a partial subsidy, or negotiate discounts with fitness providers. Group memberships and those offered through providers can be more cost-effective than what is available on the private market. Larger companies may invest in on-site fitness which has a higher upfront cost but potentially long-term savings.

Taxation

If a fitness facility is provided on-site, operated by an employer, and used substantially by employees and their families, this will not be included in an employee’s gross income calculation.

Fitness memberships paid for by the employer are otherwise considered a fringe benefit which is part of an employee’s gross income calculation. If the membership fees are paid by the employee, this tends to come from net pay (after-tax).

Implementation and Administration

Employers should choose a provider that aligns with their budget and workforce needs. This includes taking into account the geographic and demographic diversity of all employees, ensuring it is an inclusive offering. The employer should communicate the availability of the benefit, though most administration is managed directly by the provider.

Other Considerations

Employers should consider how fitness memberships form part of a wider wellness programme. This may include offering alternatives to traditional gym memberships to increase participation rates.

Health Savings Accounts

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Key Features – How Does It Work?

In the US, health savings accounts (HSAs) are tax-advantaged accounts that can be offered alongside High-Deductible Health Plans (HDHPs) to help employees save for qualified medical expenses. Contributions can be made by employees and employers, and funds can be used to pay for medical expenses such as deductibles, co-pays, and prescriptions. HSAs are owned by the individual, meaning they can be transported when leaving a job, and the funds will roll over each year. Some providers now offer HSAs on platforms linked to spending cards, which allows employees to monitor their use of this benefit and have immediate access to funds.

Cost and Funding

HSAs are funded through contributions by employees, employers, or both. Contributions are made via payroll deductions before tax. There are maximums on the amount that can be contributed to an HSA each year.

Taxation

Contributions to an HSA are tax-free. Deposits within the account are able to grow tax-free, and withdrawals for medical expenses are also not taxed. After the age of 65, or in cases of disability or death, non-medical withdrawals are subject to regular income tax. Non-medical withdrawals before this date are subject to a 20% penalty in addition to income tax.

Implementation and Administration

An employee can only contribute to an HSA if they have a HDHP. This is a plan that has a higher deductible than a traditional insurance plan. Because the deductible is higher, the premium is usually lower.

An employer usually sets up HSAs through partnerships with a financial institution. Contributions are taken directly from payroll. Employers should monitor contribution limits and take steps to educate employees about eligible expenses.

Other Considerations

Employers should consider how HSAs integrate with their overall healthcare strategy. This includes considering the benefits and drawbacks of offering HDHPs and HSAs versus traditional health insurance plans.

Health Screening

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Key Features – How Does It Work?

Health screenings involve a range of tests and assessments that aim to identify potential health risks early. Employers typically partner with a provider who completes these tests either on-site or at clinics. Participation should be entirely voluntary and results treated confidentially.

Cost and Funding

The cost of health screenings depends on the scope of the service. For a cost-effective solution, employees can fill out surveys about their lifestyle habits. Having in-person tests or mental health assessments is likely to cost more. In most cases, the employer will fund the assessment or it will be covered under private health insurance. Given the costs of healthcare in the US, identifying potential health risks early can save both the employer and employee significant costs in the long term.

Taxation

Employer-sponsored health screenings that are considered part of a broader health and wellness programme are generally considered non-taxable benefits for the employee.

If the employee pays, this would be a tax-deductible expense.

Implementation and Administration

Employers should partner with a provider that offers health screenings. This may take the form of surveys, at-home test kits, or through clinics. Some employers may choose to organise on-site visits to increase participation. The third party provider is normally responsible for organising data collection, while the employer should manage internal communication about the benefit. Employers should ensure they are complying with all local regulations, including the privacy of healthcare information under the Health Insurance Portability and Accountability Act (HIPAA).

Other Considerations

Employers should ensure they have other health benefits available as follow-up resources if required, such as mental health support or private health insurance. Employers should ensure the benefit is available to all employees, including those that are based in rural areas or work remotely.

Mental Health Support

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Key Features – How Does It Work?

While many companies offer mental health support through Employee Assistance Programmes (EAPs), there is an increasing focus on mental health as a separate benefit. This typically involves partnering with a specialised mental health provider who offers online resources and counselling sessions. These services aim to provide a more sophisticated service that is focused specifically on employees’ mental health. These services are typically offered online and may include text therapy and one-on-one counselling.

Cost and Funding

The cost of mental health services will depend on the extent of the offering. Most providers offer a tiered model that starts with resources on a portal, with additional personalisation for therapy and counselling options. The cost of these programmes tends to be similar to or slightly higher than EAPs.

Taxation

Mental health expenses are treated similarly to expenses related to physical health. This means they have similar tax advantages. If offered as part of a group health plan, the expense will not be considered gross income for the employee. Employees are able to use funds from a Flexible Spending Account or Health Savings Account to pay for mental health services.

Implementation and Administration

Employers should partner with a mental health provider that best suits their budget and workforce needs. They should communicate the benefit to employees and direct them to enrolment. After enrolment, administration of advice and appointments is handled by the third-party provider. This helps to protect the confidentiality of the employee.

Other Considerations

Mental health support should be complemented by training for senior staff on the importance of mental health and how to spot signs of illness. Employers should aim to partner with a provider that offers geographic and demographic coverage for all staff.

Nutrition Support

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Key Features – How Does It Work?

Nutrition support in the US typically includes access to dietitians or nutritionists through health insurance plans or a specialised provider. This may involve personalised nutrition counselling, meal planning tools, or food intolerance testing. It is increasingly offered online, with resources on a portal or app and virtual consultations with dietitians. These services can improve an employees overall health as well as addressing specific health concerns like weight management, diabetes, or chronic conditions.

Cost and Funding

The cost of providing nutrition support will vary depending on the scope of services. Employers may fund these costs directly or offer them as a voluntary benefit with a discounted rate. Small businesses may face higher per-employee costs compared to larger companies that can negotiate group rates.

Taxation

In the US, the tax treatment will depend on how the benefit is offered. If provided through employer-sponsored health insurance or wellness programmes, these benefits are generally tax-exempt for employees. However, if services like food intolerance testing or premium coaching are offered as fringe benefits outside of a healthcare plan, they may be considered taxable income for employees unless they qualify as a medical expense.

Implementation and Administration

To implement a nutrition support benefit, employers typically partner with third-party providers that specialise in nutrition services. Employers should communicate the offer to employees and manage enrolment. Employers must ensure compliance with privacy regulations when handling sensitive health information related to nutrition counselling.

Other Considerations

Employers should ensure services are culturally sensitive and accommodate diverse dietary needs and preferences. Partnering with online providers can ensure that all employees, regardless of location, are able to access the benefit.

Optical Care

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Key Features – How Does It Work?

Optical care, typically referred to as vision insurance in the US, can be offered as an add-on to employer-sponsored health insurance or as a standalone benefit. These plans cover routine eye exams, prescription glasses, and contact lenses, with varying levels of coverage for frames, lenses, and other materials. Similar to health insurance, plans often include maximums, network restrictions, and in some cases, deductibles or waiting periods

Cost and Funding

The cost of vision insurance is usually shared between employers and employees. Employers can negotiate group rates with insurers and may offer flexible spending accounts (FSAs) or health savings accounts (HSAs) to help employees manage out-of-pocket expenses. Premiums depend on the level of coverage provided, with basic plans starting at only a few dollars per month and more comprehensive options costing more. Employers should consider whether it is more cost-effective to partner with a specific vision insurance provider or remain with their health insurance provider.

Taxation

The tax treatment for vision insurance is the same as that for a private health insurance plan. This means that employer-provided coverage is not included in an employee’s gross income.

If the employee contributes to the premium, the payment will be made post-tax unless it is done through a cafeteria plan. Benefits or coverage is typically tax-free.

Implementation and Administration

Implementing vision insurance involves selecting a provider and agreeing on policy terms. In most cases, this coverage is bundled with a health insurance policy, which provides a convenient way for employers to offer the insurance while also making it easy for employees to enrol. Administration is managed through an online portal which is facilitated by the provider, and allows employees to submit claims, track coverage, and access the network of providers. Any claims are processed and paid by the insurer.

Other Considerations

Expenses incurred outside the network system can result in high fees. It is important to have clear information on what is covered and which health care facilities are available to employees.

Employees are covered for the time that they are employed. COBRA regulations allow individuals who lose employer-sponsored health benefits, including vision, to continue coverage at their own expense.

Most providers only allow changes to health insurance during an open enrolment period. Employers should clearly communicate the options and deadlines to employees.

Seasonal Vaccinations

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Key Features – How Does It Work?

Seasonal vaccination programmes in the US typically involve employer-organised flu shot clinics held on-site or through partnerships with local pharmacies or healthcare providers. These programmes are voluntary and designed for convenience, allowing employees to get vaccinated during work hours. Some employers also extend the benefit to family members or provide vouchers for off-site vaccinations. Programmes may be complemented by educational campaigns to raise awareness about the importance of vaccinations and address vaccine hesitancy.

Cost and Funding

For employers that offer health insurance, flu shots are typically covered with no co-payment or deductible as they are considered a preventive service. Employers that offer on-site programmes will have to fund the temporary clinic and its staff.

Taxation

Employer-provided seasonal vaccination programmes that are covered under health insurance are considered a non-taxable fringe benefit for employees.

Implementation and Administration

To implement an on-site vaccination programme, employers can partner with mobile vaccination services. Employers are responsible for scheduling clinic dates and times, securing consent forms, and promoting the programme through internal communications. Smaller companies may prefer to partner with local clinics or pharmacies, or run information campaigns that direct employers to locations where they can be vaccinated.

Other Considerations

Companies should ensure accessibility for all employees, including remote workers or those in different locations, by offering flexible options such as vouchers or reimbursement programmes. Employers should provide comprehensive information about the vaccination, including potential side effects. Any seasonal vaccination programme should be timed appropriately to ensure maximum effectiveness.

Women's Health

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Key Features – How Does It Work?

Women’s health benefits in the US workplace typically include a range of resources and accommodations tailored to the unique needs of female-identifying employees. This may include mental health support, menopause education, or menstrual health workshops. Some companies also offer abortion care support, which can include coverage for travel expenses when care requires interstate travel. Employers can partner with providers that offer specialised care, or signpost information. Tailored workplace adjustments, such as ergonomic equipment or private spaces for managing health needs, are also becoming more common.

Cost and Funding

Women’s health benefits can range from low-cost options, which focus on educational resources and flexible working arrangements, to more comprehensive offerings, such as counselling or healthcare appointments. Many employers offer health insurance that cover these benefits within their network. Additionally, they may partner with a third-party provider which specialises in women’s health.

Taxation

If this benefit is included as part of employer-provided health insurance, it will not be considered gross income for an employee.

If the employee contributes to the premium, the payment will be made post-tax unless it is done through a cafeteria plan.

Implementation and Administration

Employers should understand what is covered under their existing health insurance policy when choosing a women’s health provider. This can simplify administration and enrolment while ensuring comprehensive coverage. Employers should also allocate resources towards training managers to create more awareness in the workplace.

Other Considerations

Employers should consider inclusivity when designing women’s health benefits by ensuring they address the needs of all female-identifying employees, including those in LGBTQ+ communities or with disabilities.

Lifestyle

Annual Leave Purchase Scheme

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Key Features – How Does It Work?

In the US, Annual Leave Purchase Schemes, often referred to as Vacation Buy Plans or PTO Purchase Plans, allow employees to purchase additional leave during an open enrolment period. The purchased leave is paid for via payroll deductions, often spread evenly across the year. Employers may cap the number of days employees can buy, typically between 5 and 10 days annually. Selling back unused leave is less common but may be offered in some plans. These schemes are voluntary and subject to approval by supervisors to ensure operational needs are met.

Cost and Funding

The cost of purchase leave is determined on the employee’s base salary and then deducted in instalments throughout the year. While employers have to be aware of how it affects workforce planning, this is a low cost benefit to offer as there is no financial cost. However, allowing employees to sell unused leave may create additional financial obligations for employers.

Taxation

Vacation Buy Plans can offer tax advantages if administered through a Cafeteria Plan. When structured this way, employees can use pre-tax income to purchase additional leave, reducing their taxable income for the year. However, selling back unused leave is typically treated as taxable income and subject to standard income tax and payroll deductions.

Implementation and Administration

Employers should establish eligibility criteria, such as how part-time staff can participate, and define rules for purchasing and using additional leave. Administration is often handled through HR software systems that integrate payroll and benefits management. Employers must also ensure compliance with federal and state labour laws, particularly regarding wage deductions and accrual policies. Employees should be made aware of how purchasing leave may impact their usual salary.

Other Considerations

Employers should manage these schemes thoughtfully to avoid disruptions to business operations, particularly during peak periods when multiple employees may seek additional time off. Implementing limits on the number of days employees can buy or sell, as well as establishing clear guidelines on when purchased leave can be taken, ensures a balance between offering employee flexibility and meeting organisational demands.

Commuter Scheme

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Key Features – How Does It Work?

In the US, employees can use pre-tax income to cover qualified transportation expenses. This applies to various commuter expenses such as transit passes, commuter highway vehicles, and qualified parking. Bicycle commuting expenses are excluded from tax benefits until 2026. Employers can offer these benefits through pre-tax payroll deductions or third-party administrators who manage transit vouchers or debit cards restricted to fare-related purchases. Some cities and states legally require employers, typically with a specified number of employees, to offer these commuter benefits.

Cost and Funding

The commuter scheme structure in the US means both the employee and employer can save money on tax and other contributions. The cost of offering a commuter scheme is mostly administrative, particularly if partnering with a third-party provider.

Taxation

Up to $325 per month is exempt from federal income tax for qualified transportation benefits. This amount is adjusted each year. Any misuse of commuter benefit funds (e.g., for non-transportation purchases) results in the amount being treated as taxable income for the employee.

Implementation and Administration

Employers can manage commuter benefits directly or through third-party providers who handle enrolment, compliance, and distribution of transit vouchers or debit cards. Debit cards must be restricted to merchants using fare-related Merchant Category Codes (MCCs) to comply with IRS guidelines. Best practices include allowing employees to choose their contribution amounts based on commuting needs and rolling over unused funds to subsequent months.

Other Considerations

Commuter benefit programs contribute significantly to environmental sustainability by encouraging mass transit use and reducing vehicle emissions. Cities like San Francisco and Seattle mandate such programs for larger employers as part of climate strategies. Employers should ensure proper reporting to avoid penalties for non-compliance.

Employee Assistance Programme

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Key Features – How Does It Work?

In the US, Employee Assistance Programmes (EAPs) typically offer a range of services, including confidential counselling, legal and financial advice, substance abuse support, and crisis intervention. These programmes often include 24/7 helplines, and access to licensed professionals for short-term counselling. Services are designed to be easily accessible via phone, online platforms, or in-person consultations, ensuring employees can seek help conveniently and discreetly.

Cost and Funding

EAPs are generally funded by employers as part of their core benefits package. The cost is typically calculated on a per-employee-per-month basis, and varies depending on the scope of services. Some employers opt for bundled EAP services through their health insurance providers, while others contract with standalone EAP vendors. For small businesses, group purchasing arrangements or shared service models can make EAPs more affordable.

Taxation

If an employer pays for and provides a work-life referral programme that offers logistical support, such as an EAP, it is generally classified as a de minimis fringe benefit under US tax law. As a result, the cost of the programme is excluded from the employee’s gross income. If there is more personalised one-on-one support, such as direct life-management resources, this may be considered imputed income and subject to tax.

Implementation and Administration

Employers typically partner with external vendors that specialise in EAPs. The process involves selecting a provider that aligns with organisational needs and negotiating service agreements. Employers are responsible for communicating the availability of the service, while administration is often handled by the provider, which manages employee access, confidentiality protocols, and reporting metrics.

Other Considerations

An EAP serves as the initial point of contact for employees and is designed for short-term support. Employers should ensure it integrates effectively with other benefits, allowing employees to access more specialised care if needed. Fostering a mental health-friendly workplace culture is important for maximising these benefits and any EAP should be part of a broader mental wellbeing strategy.

National Holiday Trading

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Key Features – How Does It Work?

In the US, companies offer holiday swapping and / or floating holidays to allow employees to have days off that align with their personal and cultural preferences. Holiday swapping is when an employee trades a national holiday for another day off. Floating holidays are designated additional leave, typically one or two days, that employees can use at their discretion in addition to national holidays. Employers may set specific rules, such as limiting the number of tradable holidays or requiring advance notice for such requests. These schemes are designed to enhance inclusivity and accommodate diverse workforce needs.

Cost and Funding

The cost to employers for administering national holiday trading schemes is minimal, as they primarily involve the reallocation of leave. While holiday swapping schemes require some administrative resources to manage the trading process, the overall financial impact is generally neutral for employers as there are no additional leave days. Floating holidays involve additional days which should be accounted for in workplace planning.

Taxation

In the US, these schemes have minimal or no direct tax implications because they do not involve salary adjustments or pre-tax benefits. Employees receive their days off as part of regular paid leave, without affecting their taxable income.

Implementation and Administration

To implement national holiday trading, employers need clear policies that define eligibility, the holidays available for trade, and procedural requirements such as maximum traded days and advance notice periods. Administration typically involves coordination between HR departments and payroll systems to track leave balances accurately.

Other Considerations

Employers should ensure the policy maintains fairness for all employees, including those who may not wish to trade holidays. There should be clear communication about the scheme’s rules and benefits to encourage participation and avoid misunderstandings. Offering this benefit can enhance a company’s reputation for inclusivity and flexibility, making it more attractive to a diverse talent pool.

Payroll Giving

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Key Features – How Does It Work?

In the US, payroll giving, also known as corporate giving programmes or employee workplace giving, allows employees to make charitable donations directly from their pay checks, which can be facilitated through workplace giving platforms or payroll systems. These donations are made post-tax, with employees able to claim them as tax-deductible contributions when filing their annual tax returns. Employees can select the charities they wish to support, and donations are automatically deducted and transferred to the chosen organisations.

Cost and Funding

The cost of implementing a payroll giving programme in the US primarily involves administrative expenses for integrating workplace giving software or partnering with a payroll giving provider. Employers tend to cover these costs to encourage participation.

Taxation

In the US, payroll giving operates on an after-tax basis, meaning donations are deducted after income tax is calculated. However, employees may claim these contributions as tax-deductible when filing their federal income tax returns, provided they itemise deductions and the recipient organisation qualifies under IRS rules for charitable giving. Employers should assist in this process by ensuring clear statements of donations are provided during tax season.

Implementation and Administration

Employers can either partner with a workplace giving platform or integrate the scheme into their existing payroll system. The process involves setting up donation options, promoting the programme to employees, and organising deductions via payroll. Providers simplify administration by automating tasks such as fund distribution and reporting, reducing the burden on HR and finance teams and potentially simplifying tax returns for employees.

Other Considerations

Donation options should be as broad as possible to allow employees to support their preferred cause. Employers should consider offering matching gift programmes to increase employee contributions and engagement. Regular updates on donation milestones and the charities supported can foster a sense of collective achievement among employees.

Recognition Programme

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Key Features – How Does It Work?

Recognition programmes are designed to reward employees for their contributions, achievements, and alignment with organisational values. These are normally delivered through a third-party platform that include a combination of peer-to-peer recognition, manager-led awards, and structured celebrations for milestones such as work anniversaries or exceptional performance. Employers can tailor these programmes based on their culture and workforce.

Cost and Funding

The cost of recognition programmes varies depending on the size of the organisation and the scope of the rewards offered. Providers tend to offer a per employee, per month cost model. Additional costs include financing monetary rewards and non-monetary incentives.

Taxation

In the US, the tax treatment of recognition rewards depends on their form. Cash bonuses and cash-equivalent rewards like gift cards are generally considered taxable income. Some smaller gifts, such as company merch, may be considered a de minimis benefit. Employers must ensure compliance with these regulations by accurately tracking benefits provided through recognition initiatives.

Implementation and Administration

Recognition can take many forms, including public praise, certificates, gift cards, cash bonuses, or experiential rewards like event tickets. Companies should carefully consider the behaviours and achievements they wish to reward. Administration involves creating processes for nominations, approvals, and reward distribution. Regular communication is essential to ensure employees understand how the programme works and feel encouraged to participate.

Other Considerations

When designing a recognition programme, organisations should consider inclusivity, fairness, and accessibility. All employees, regardless of role or location, should have an equal opportunity to be recognised.

Retail Discounts

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Key Features – How Does It Work?

Retail discount programmes offer employees access to a wide range of discounts on products and services, including groceries, electronics, travel, and entertainment. The benefit is typically delivered through an online platform or app. Employees can browse deals from major retailers and local businesses, often with options for cashback or direct discounts at checkout.

Cost and Funding

The cost of implementing a retail discount portal is relatively low for employers. Many providers charge a subscription fee based on the size of the organisation or offer free access funded through affiliate partnerships with retailers. Employers may also opt to subsidise certain discounts to enhance the benefit's value for employees.

Taxation

In the US, discounts accessed through these portals are generally not considered taxable income for employees, as they are treated as third-party benefits provided by external vendors. Employers should ensure compliance with state-specific sales tax regulations, which vary widely and depend on factors such as the type of discount and the retailer’s location.

Implementation and Administration

Implementation involves selecting a platform provider and integrating the portal into existing HR systems. The third-party provider is then responsible for employee’s account management, minimising employer involvement. Employees can access discounts directly through the portal or app.

Other Considerations

Employers should focus on communicating the availability of the platform and encourage its use. This may include actively assessing employee preferences to ensure the portal offers relevant discounts.

Leave & Remote Working Policies

Additional Leave

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Additional leave includes any paid or unpaid leave that is offered by employers for non-statutory purposes. Examples include company days, mental health days, volunteer leave, and birthday leave. Employers establish their own policies for how to request and log these days.

Annual Leave

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Annual leave, known in the US as vacation time, is paid time off work designed for personal activities.

Vacation is not federally or locally mandated in the US. It has become a common employee benefit, with most companies offering between 10 to 15 days per year. Vacation is commonly offered as part of Paid Time Off (PTO), where all types of leave, including vacation and sick leave, are categorised as one policy.

The government has 11 designated federal holidays. It is not mandatory for employers to have leave on these days. Many private companies offer this as a standard employee benefit.

Carer’s Leave

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Carer’s leave is paid or unpaid time off to provide personal care or support to a dependant.

In some states, this is covered under statutory insurance programmes which allow employees time off to care for a family member. At the federal level, up to 12 weeks is available as unpaid leave in companies that have more than 50 employees.

Compassionate & Bereavement Leave

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Compassionate and bereavement leave is time off work for personal loss or other family emergencies.

This leave is not mandated at the federal level, but some states may include it as part of their statutory insurance programmes, and others have it available as a separate category of leave (California, Illinois, Maryland, Oregon, and Washington). Companies may also choose to include this as part of Paid Time Off (PTO) policies.

Family Violence Leave

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Family violence leave is paid or unpaid time off for those affected by family violence. This may also be referred to as safe leave.

In some states, this is covered under accrued sick leave policies or statutory insurance programmes, and others have it available as a separate category of leave (California, Illinois, Oregon, and Washington).

Flexible Working

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Flexible working means finding a way of working that suits an employee’s needs. This may include having flexible start and finish times, or working from home. Some examples of flexible working include job sharing, remote working, hybrid working, part time hours, compressed hours, flexitime, or staggered hours.

Flexible working became popular in the US during the COVID pandemic and many employers continue to offer it. Vermont is currently the only state with laws allowing employees to request flexible working arrangements for any reason.

Maternity Leave

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Maternity leave is paid time off for mothers before and after childbirth.

Employees that work for companies with more than 50 employees are covered at the federal level for 12 weeks of unpaid leave. In some states, this leave is paid under statutory insurance programmes which are neutral to the parent. Some leading companies offer employer-paid maternity allowance above state requirements, both in duration and pay amount.

Paternity Leave

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Paternity leave is paid time off for fathers after childbirth.

Paternity leave is not federally regulated. In some states, this leave is paid under statutory insurance programmes which are neutral to the parent. Some leading companies offer employer-paid paternity allowance above state requirements, both in duration and pay amount.

Remote Working

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Remote working policies provide employees with the flexibility to work from locations outside of the office, typically from their own homes. While these arrangements can fall within the definition of flexible working requests, many employers have begun to offer remote working as a standard practice.

Remote working became popular in the US during the COVID pandemic and many employers continue to offer it. There are no statutory regulations around remote working arrangements and employers may require their employees to attend the office in-person.

Sick Leave

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Sick leave is time off for employees to recover from illness.

Sick leave is not federally mandated. In some states, this is covered under statutory sick leave provisions which operate on an accrual system where employees receive paid leave based on the number of hours worked.

Sick leave has become a common employee benefit, with most companies offering between 5 to 10 days per year. Sick leave is commonly offered as part of Paid Time Off (PTO), where all types of leave, including vacation and sick leave, are categorised as one policy.

Spending Allowances

Lifestyle Spending Accounts (LSAs)

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In the US, employers are increasingly offering a Lifestyle Spending Account (LSA) as a flexible employee benefit. These accounts are employer-funded, normally with internal rules around spending limits and eligible expenses. The spending limits can be set or tied to performance. The eligibility can focus on specific goals, such as health and wellbeing initiatives or promoting sustainable practice, or allow employees to spend on whatever they wish.

LSAs can be linked to a virtual card which enables the employee to access and make purchases within the general consumer market. This creates flexibility for the employee to choose the best product for their situation.

LSAs are not tax-advantaged. This means that any amount spent by an employee is considered income and will be liable for income tax. For this reason, they should remain distinct from medical expenses and associated benefits which have different tax rules.

Common categories for LSAs include green and sustainability initiatives, learning and development, health and wellbeing, and work from home allowances.

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