Great idea:
DO NOT!!! Biggest mistake I ever made. Providing health insurance (Blue Cross/Blue Shield -- the best here). Also gave 401Ks, but another story.
Bonuses:
Advantages:
1. Always a positive thing. They love it. It helps with Christmas.
2. You can go up and down but they still are happy especially with good performance reviews and explanations. You could even delay it or skip it one year and you haven't COMMITTED to anything.
3. Bonuses aren't premiums. They don't go up or down. You aren't tied to the whim of the biggest rip off racket in American history.
4. You can make it VERY, VERY clear that they CANNOT share the amount with anyone or there will be consequences. I have not had an issue with this.
5, It actually is in your control to decide how much someone should get.
Disadvantages:
They are all excited and thankful, but they may not remember it all year....but not a big issue.
Insurance:
Advantages:
1. You will feel good about yourself. In discussions with parents just in general about the healthcare system, you can say, "Yes, I can't believe what I pay for employee insurance...." Now, I can say, "Wow, I can't believe what I used to pay my employees for their insurance...."
2. You know they have insurance.
3. I don't know about taxes and deductions.
Disadvantages:
1. Pretty much everything. Having to listen to an insurance sales rep lie to you and sell something to you that is almost worthless.
2. It is generally tied into if the employee has so many hours. So, they go to part time or go to full time....could change things and even others' insurance.
3. The premiums ONLY go up. Have you seen them go down?
4. Be prepared to spend one to two weeks and a two-meeting with an insurance rep going over the new plans you must buy every year. Only about 20 options.
5. Imagine giving a bonus and hearing monthly from your employees, "Damn, I bought too many gifts for Christmas because of those bonuses." They suck.....
Well, that is all you will hear about the insurance. Do you know how many times I heard thank you for paying for the vast majority of the staff's insurance was? Ready. Correct. Zero. All I heard was, "Insurance sucks. This insurance is horrible. I am paying $25.00 a week, and it didn't even cover my lab work. I still had to pay a $30.00 copay for my prescription." It is like so someone on Medicaid complaining they can't get Ambien until they fail Trazodone. They say, "Medicaid sucks." Ummm, right.
6. Your insurance will likely be tied into the same group.
7. Just like 401Ks, if you end up having to stop the insurance, the employees don't say, hey thanks for four years of good Anthem insurance. No, they will look at it like, "Damn, now he is taking away my benefits."
Even if you went low on a bonus with a good reason, in May you could give some. But, you can't just start and stop insurance.
There are only a few bills like insurance. Every time I signed the check, I would nearly throw up. I would be so pissed off.
Oh, and then get ready for the fun part. You decide it is too expensive. Like mine went from Grade A insurance at $1850 a month plus their contribution to Grade B at $2200 plus. I decided to stop. But, I am nice. So, I figured I couldn't just stop it in a month. So, I told them that I would do it one more year. Wrote it down in the manual and everything. Told them at least four times near the next year that we weren't renewing the insurance. They still acted like they didn't know.
With the 401K, this is what I heard from one employee:
So, now you are lowering my pay by ~ $5,000 a year.
God....no I matched you ~ $5,000 a year for three years. You got a free $15,000 you would not have received.
It would be decent if they appreciated it. But, it's human nature. When I get my EOB for $450 worth of lab tests, and the insurance pays nothing, I complain to anyone within 500 feet. So, do they.
Of course, when you increase their pay, you increase the match possibility in the 401K.
