Employee benefits are a fundamental piece of a company’s cultural goals. We sat down with Marcus Acaster, the founder and principal of Nü Benefits to discuss some of the most common questions startup founders have about employee benefits. Nü Benefits (a division of Benefy Group Solutions) is Canada’s leading low-fee, high-value employee benefits brokerage. They work with tech and software startups to implement, review, and manage employee benefit programs with up to 75% lower fees and commissions than other brokers in Canada.
Eric: Many of our founders are in the early stages. At what point should founders start thinking about employee benefit programs?
Marcus: As soon as founders incorporate their Startup, they should be looking at setting up a Health Spending Account (HSA). An HSA doesn’t provide insurance, but rather they are a CRA-approved tax-saving tool that can help startups save money early on by turning personal health and dental expenses into operating expenses within their corporation. An HSA can save founders up to 40% on eligible health and dental expenses.
Once a core team has formed, usually 3-4 people including founders, you can start looking at a basic benefits package. There are pooled plans that are designed for small teams and can provide a great starting point even if your budget is limited.
Eric: What are some of the main reasons Startups should offer employee benefit programs?
Marcus: Your employees are your greatest assets. First and foremost, providing employees with protection from catastrophic events is the primary reason a Startup should be offering benefits. Stakeholders often overlook this risk until a team member or one of their family members needs a high-cost medication that can cost hundreds of thousands per year. The amount of mental and financial stress something like this can cause is immense and often overlooked for the “nice to have” benefits such as massage therapy.
Studies have shown that the ROI on employee benefits typically ranges between $1.50 to $2.50 for every $1.00 invested into employee benefits so there is a strong financial case for why benefits, even in early stages, are a smart investment for Startups.
Eric: How does Nü Benefits offer 50% to 75% less fees and commissions than other brokers?
Marcus: By leveraging digital tools, artificial intelligence, and online administration, we can reduce overhead costs and pass these long-term savings onto our clients. We skip the 5-course client lunches and expensive hockey tickets so we can save our clients money.
Since the cost-savings come directly from reduced commissions, these cost-savings are permanent as long as you keep your plan with us. Most brokers offer cost savings through “marketing discounts” for new benefit plans where insurers offer lower rates for the first year and recoup the savings at the first renewal.
Eric: What are some trends you’re seeing with Startups and tech companies?
Marcus: Benefit plans today are beginning to look very different from our parent’s benefits plans. Employees want to feel that their employers care about their well-being beyond prescription medication and teeth cleanings. That’s why we’re seeing an emphasis on flexible benefits, mental health support, and digital tools that allow benefit plans to better fit the needs of each employee and their families.
Eric: What advice would you give a founder who is looking to start their first plan?
Marcus: Firstly, find a broker or advisor who understands your industry and who you can build trust with. Would you trust your accountant to give you a root canal? Probably not, so why would you want your investment advisor or property insurance broker to manage your employee benefits plan? At Nü Benefits, we offer employee benefit plans and that’s it. It allows us to be hyper-focused and experts in our field.
Eric: How much can a company expect to pay for benefits?
Marcus: Benefit costs can vary greatly depending on demographics and plan design but as a general rule of thumb, benefit costs typically fall within the range of 2-10% of payroll.
Check out Nü Benefits here or reach out to Marcus directly at email@example.com if you want to learn how Nü Benefits can help keep your employees happy and healthy without breaking the bank.