Key considerations for farm employee benefits

WHAT SHOULD FARM BUSINESS OWNERS CONSIDER WHEN IT COMES TO EMPLOYEE BENEFITS?

Employee or group benefits plans can be an asset for farm employers and a significant perk for their employees. They provide coverage and support and help maintain the health of farm employees and their families, while promoting a positive work environment.

Offering employee benefits can also help farm business owners attract and retain employees. Employee benefits are an added value and may increase the likelihood that your farm will attract quality candidates during recruitment.

There is plenty of flexibility when designing employee benefits packages. They can be customized for any type of farm and employment situation, including full-time, part- time, and seasonal workers. Packages can also be designed for owners, employees, and family members who are part of the farm business.

WHAT OPTIONS ARE AVAILABLE FOR BENEFIT PACKAGES?

Group healthcare benefits can be categorized into insurance, healthcare, dental, and prescription drug coverage. Group retirement savings plans are also available.

Insurance plans can include life, accidental death, and dismemberment (AD&D), critical illness (CI), disability (DI), and long-term disability (LTD) coverage.

We often see farm business owners offer traditional healthcare, insurance, and dental plans to permanent full-time employees,including family members who work on the farm or who are part of the farm’s ownership structure. We have also seen a shift in new employee farm structures. Farm labour shortages have resulted in more part-time and seasonal workers, and there are plenty of benefits options to fit every farm and its employee model.

Recently, healthcare spending accounts (HSAs) have become popular with small business owners. HSAs are also attractive to employees, offering more flexibility in how they use their benefits.

Healthcare spending accounts assign a customized fixed dollar amount of benefits that employees can use. The Canada Revenue Agency determines eligible medical and dental expenses, which can be used to cover expenses such as medical, hospital, vision, and dental care. For those who have benefits plans, a healthcare spending account can also be used to pay for or top up expenses that are not covered.

A healthcare spending account can also be offered as a standalone benefit to employees. This is becoming a popular option for part-time and seasonal workers. The healthcare spending account can be used to attract employees and encourage their return each season.

The healthcare spending account is also an attractive option for business owners because it provides a fixed amount per employee that can easily be budgeted. This option is so flexible that the owner can customize when they pay into the program based on cash flow projections or seasons. Farm business owners can also determine eligibility, such as extending the benefit to the individual employee or their family.

Group retirement savings plans are still breaking ground with farm business owners, but should be considered as they are growing in popularity, especially with young employees. Recent changes to these programs allow first-time home buyers to use some of their retirement savings to purchase their first home. Retirement savings programs are flexible and can be designed to fit any farm business structure.

WHAT QUESTIONS SHOULD FARMERS ASK BEFORE SPEAKING WITH AN ADVISOR?

Before farm business owners talk to their advisors, they should understand their employment structure and needs. Do they offer full-time, part-time, and/or seasonal employment? In some cases, farm business owners may offer a mix of all three types of employment opportunities, and there are plenty of options available to accommodate their specific situation. Farmers should also look at their employment requirements today, as well as for the next three to five years. Knowing future employment needs will also help advisors create a plan.

Having a budget in mind helps to create a plan that suits the employment structure and the farm’s cash flow. A group broker can provide the farm business owner with a few quotes to compare pricing from different companies. Different insurance carriers offer various products, so finding the right plan that fits a farm’s budget is important. Working with a group broker allows for easy comparison of multiple carriers. •