Small business owners deal with so many problems — hiring employees, satisfying investors and managing suppliers — that employee benefits often seem like just one more task to juggle. Owners might worry about how to pay for health insurance, how to explain benefits to employees or what plan to choose. We sat down with one small business leader, Bill Lillie, CEO of Sprigs and Twigs, Inc., a landscaping company in Gales Ferry, Connecticut. Bill recently began offering employee benefits for the first time in the 21-year history of his company, and we discussed his journey to making that important decision.
Q: Tell us a little about your company.
A: We’re a landscape company with over $2 million in sales, and this is our 21st year. We deal with all aspects of the outdoor living space, including designing, installing and maintaining gardens, performing custom stonework and carpentry and providing tree care services for residential properties along the shoreline in southeastern Connecticut. We also do wedding flowers and seasonal decor. Currently, we have 20 employees, but that grows in the summertime with seasonal help. Most of our employees are college graduates with experience in the field.
Q: After 21 years as a business, what made you decide to start offering benefits?
A: Our employees were frustrated with not being able to get health care on their own. I lost a key person recently because she found another employer who offered benefits. When she told me how much she was receiving to cover her health care costs, I was shocked at how little it was. I realized that it made financial sense to offer benefits as a retention tool. I knew I had to get a benefits package in place. I decided at the same time that, in addition to health care, I would offer a 401k retirement plan and a formalized vacation/sick time plan.
Q: What was the financial case to offer health benefits?
A: As I learned more, it became clear that I’d see a positive return on investment. With the demographics of my employees, the older folks were mostly on their spouse’s plans. So the ones who I’m covering, they’re younger and healthier so their premiums are lower. We offered three tiers of plans — a gold, a silver and a bronze. Many of my employees gravitated to the lower tier plan because it matched their current needs best. We decided to cover half the cost of the bronze plan allowing them to buy up to other plans, depending on their circumstances.
Financially, it really was a no-brainer. Everybody at the company understands the business rationale for how we make the health plan successful — we all work together to earn the money to pay for it. So they’re invested in it, too. I think it’s going to pay itself off. Losing a person who left to get benefits elsewhere, it’s expensive to replace that person. Now we’re less likely to have that happen again.
Q: What’s the most important aspect of your new benefits plan?
A: Health care is number one. Retirement is probably number two. Everyone sees the value in the health plan. People who are most concerned about retirement are the ones in their 20s or 30s, and they realize they can’t count on Social Security being around when they’re in their 60s, so they have to plan now for their retirement.
Q: What was your research process like? Did you use a broker?
A: My accountant referred me to a local broker in Mystic, Connecticut. He and I did our due diligence and laid out different health plans side-by-side. We looked at six possible providers who offered plans in our part of the state.
Q: What was the decision process like?
A: We selected the winner not only based on cost but also, more importantly, the network of doctors. The plan we chose had a significantly stronger network and also allowed for having a great selection of doctors if an employee traveled. I’m an engineer, so the numbers were easy to understand and evaluate. We also chose to offer a range of plans with different deductibles and options for doctor visits in order to cover different circumstances for each employee.
Q: Once you selected a plan, how was the onboarding?
A: I was surprised how quickly we were able to roll out the plan within a couple months after our initial discussions. Our broker made a presentation to our employees, and then he offered to talk to them one-on-one. He knew all the government exchange options, so he could help navigate the folks who were on an exchange plan and receiving subsidies and make the right decision on if they should migrate to this new group plan or not. After all that, sign-up was easy.
Q: What’s the advantage of using a broker?
A: The broker really does all the hard work. He works directly with the employees — he answers their questions; takes their phone calls. That personal aspect is a huge thing.
Q: How has the plan been received?
A: With gratitude. It’s been an overwhelming response. It’s such a sense of relief on the part of the employees. There was an enormous stress level dealing with getting individual plans, so it’s a breath of fresh air that now they can get health care affordably and easily.
Q: What advice would you give other small businesses making health insurance decisions?
A: Don’t drag your feet investigating it. It’s always something that’s in the back of your mind as a small business owner, but it’s worth pursuing and getting the facts. Once I had the information, it was a no-brainer to offer a health plan. I sincerely believe it’s going to more than pay for itself. There’s also a big boost in morale from your employees. I wish I had done it sooner, but the timing worked out well.
Q: What’s been your biggest takeaway now that you’ve started offering employee health benefits?
A: It was surprisingly easy and fast. I had no appreciation about how quickly we could pull the trigger and get the paperwork completed, but it’s been a pleasant experience. I thought it would be this big expense, and it turned out not to be. Depending on how things go this year, I may be willing to offer more benefits in future years.
The Sprigs and Twigs story showcases the advantages of researching health insurance coverage for your employees and providing the best possible plans depending on their wants and needs. Take the time to assess your small business and determine what benefits are suitable for your workforce.