As a Canadian company venturing into the United States, it can be challenging to determine the best employee benefits to offer. The overall structure of the benefits in the United States is very different from the structure in Canada. There are many considerations, such as health care choices, benefits compliance, and tax regulations, to name a few.
This guide is designed to assist you in learning more about the fundamental aspects of U.S.-based employee benefits so you can be ready to attract the best talent while keeping with the laws of the land.
1. Main Differences between the U.S. and Canadian Benefits
Canadian companies should be aware that the benefits system in the United States is mainly employer-funded. While Canadians have access to publicly funded healthcare services, most Americans get health insurance through their workplace. This means that providing high-quality health benefits is an expectation and a requirement to attract the right talent.
In addition to healthcare, retirement benefits are also not equal. While in the United States, 401(k) plans are popular, typical programs in Canada include the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) and Registered Retirement Savings Plans (RRSPs). Understanding these variations can help create a package that meets the United States legal standards and satisfies workers' expectations.
2. Healthcare Coverage: Navigating the Options
In the American healthcare system, an employer is responsible for selecting the plan for its staff members that fits the company's budget and employees' needs. These plans have many options, including HMOs, PPOs, HDHPs, and HSAs. However, it's equally important to understand the Affordable Care Act (ACA) and its implications for your company. Under the ACA, employers with 50 or more full-time employees are obliged to offer eligible employees health insurance that meets specific standards. Failure to meet these measures might attract considerable fines.
3. Retirement Plans: Drawing in Talent with 401(k) Offerings
Another important element of a competitive U.S. benefits package is retirement benefits. A popular retirement savings tool in the U.S. is 401(k) plans. Unlike individual-driven RRSPs in Canada, 401(k) programs may incorporate company contributions, which can significantly increase staff involvement and morale.
An effective technique used in the U.S. for attracting and retaining talent is matching contributions to 401(k) plans. Knowing how these plans operate—including vesting dates and contribution caps—helps you create a program that satisfies American workers' expectations.
4. Concerns of Compliance
Besides the ACA, companies must comply with many human resources regulations. One example is the Employee Retirement Income Security Act (ERISA), which establishes minimum criteria for most retirement and health plans. Another example is the Consolidated Omnibus Budget Reconciliation Act (COBRA), which gives workers the choice to keep health coverage long after they leave their employment. Furthermore, following state-specific criteria is vital as every state may have different rules and regulations regarding disability benefits, leave, and healthcare.
Working with a benefits broker or consultant with U.S. expertise will help you reduce risk and compliance issues.
5. Improved Offer: Voluntary Benefits
Voluntary benefits such as dental insurance, vision coverage, life insurance, and disability coverage are used to enhance employee benefits offerings. They allow workers to arrange their benefits package to meet their circumstances. Providing a choice of optional incentives can appeal to a varied staff and help your business stand out from competitors.
6. Working with the Correct Benefits Broker
Your success in the American market depends on selecting the correct benefits specialist. Along with helping you design a thorough and competitive benefits plan, the proper partner will aid with administration, compliance, and employee education. At AGA, we leverage our cross-border expertise to simplify the benefits buying and administration process to align with Canadian and U.S. standards. This allows businesses to provide consistent, high-quality benefits across their workforce.
AGA is also a proud member of the Benefits Advisors Network (BAN), an exclusive international network of independent employee benefits firms. As a BAN member, we leverage the collective expertise, resources, and market influence of leading benefits advisors across North America. This partnership allows us to provide our Canadian clients with access to cutting-edge tools, benchmarking data, and innovative solutions that enhance the value of their employee benefits programs. By partnering with AGA, you gain the advantage of our local expertise combined with the strength of a national network, ensuring your U.S.-based employees receive the best possible coverage and support.
7. Employee Education
Employees may need clarification on all of the benefits offerings. Offering tools such as seminars, Q & A sessions, and clear, easily understood guides help staff members feel more at ease and involved with their benefits offerings.
Knowing and providing a solid employee benefits package can help your business stand out. Familiarizing yourself with U.S. benefits rules, regulations, and offerings will enable you to design a benefits package that satisfies legal needs and helps you attract and keep top talent.
Our cross-border specialists can assist you in developing a strong U.S. benefits plan for your Canadian business.
Holder of a bachelor’s degree in Actuarial Sciences from Université de Montréal and Associate of the Canadian Institute of Actuaries (ACIA) and the Society of Actuaries (ASA), Jhonny brings 20 years of experience in benefits consulting, including the past 16 years with a global actuarial consulting firm. During this time, he played a significant role in business development/visibility, and also as a manager, mentor and member of the local leadership team. A dynamic and passionate leader, Jhonny takes on challenges with confidence and enthusiasm!