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We keep reading in the popular press that employees are walking away from their employers in record numbers. According to the U.S. Labor Department, approximately 4.3 million workers quit their jobs in December 2021, slightly fewer than the record 4.5 million the month before. An interesting counterpoint to that view is one in a recent Wall Street Journal article that held that despite the worker shortage, a noticeable number of employees are resigning because they cannot get enough hours scheduled to make it worth their while to stay.

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Either way, employers face the well-publicized problem that workers are willing to quit jobs and turn down open positions that don’t satisfy their needs. During this period of “the great resignation” (a phrase apparently coined by Texas A&M professor and organizational psychologist Anthony Klotz,), employers need to demonstrate their value to employees or risk losing them. Assuming giving them enough hours is not the issue, employers must show that they can provide workers with more than just a paycheck. Can benefits be a part of that offering to help retain their employees and even attract new ones?

Let’s look at a few options employers are using to strengthen their attraction and retention efforts. Of course, the baseline assumption is that employers are offering sufficient hours to make it worthwhile for the employees to stay on to work there. 

Make Medical Benefits More Available, More Valuable and More Affordable – Reversing Prior Strategy

Many workers who quit their jobs at the end of 2021 were front-line, low-wage, or low-level employees, according to several reports. Few of these workers, often from the service sector, had access to substantial employee benefits, if any at all. After enduring the worst of the COVID-19 pandemic, these employees concluded that their labor wasn’t worth their compensation even if they had full-time schedules.Untitled design (1)-3

Some employers have picked up on this and are now beginning to offer more attractive benefits to low-level employees. After the implementation of the ACA, many employers’ only thoughts were how to limit medical benefits to lower-level employees. They came up with various strategies including limiting hours to avoid the employees becoming full-time (and therefore eligible for medical benefits) or offering bare bones medical plans that met the ACA requirement of “minimum essential coverage” (often referred to as “MEC plans”). The MEC plans are particularly difficult for lower-level employees as they often do not understand just how little coverage MEC plans offer. Now employers may want to rethink those policies.

Beyond increased compensation, some employers are starting to offer affordable health plans and financial wellness resources. Since these workers have historically been unable to access such offerings, even modest benefits can make a huge difference when pursuing these employees.

Student and Other Loan Repayment Assistance

A recent report from Financial Health Network confirmed what we have heard generally, that many employees are struggling with their debt or the debt of family members. These worries about debt affected their performance, they were eager for assistance with debt repayment, and they would be more likely to stay with an employer that offered benefits to assist with debt repayment.

Employers can offer a variety of assistance for their indebted employees ranging from access to credit counseling and other educational resources to actually paying off all or a part of that debt. Depending how those benefits are structured, they can be taxable benefits, or in the case of student loan debt, non-taxable up to $5,250 per employee per year. While non-taxable direct tuition reimbursement by employers has long been part of the Internal Revenue Code, Congress temporarily extended that tax benefit to student loan repayments under the CARES Act (through 2021), and then extended it through 2025 by the CAA. For employers with large college-educated workforces, direct student loan repayments with the added benefit of being non-taxable can be a very attractive option for the affected employees. Other types of direct debt payment options, while still very valuable and attractive to affected employees, do not have the same tax advantage.

Retirement Plans

Retirement uncertainty remains a top concern for employees. The data are mixed on employee confidence about the ability to save enough to retire. A recent survey from the Employee Benefits Research Institute reported that, in general, retirees were confident in their ongoing ability to live comfortably in retirement. Even after the events around COVID, those feelings were not shared as universally among current employees and in particular among various segments (lower paid workers for example) of an employer’s population.

Therefore, providing employees with retirement plan options, such as a 401(k) plan that includes a significant employer match, can be a great way to add value and financial security to a position. While not strictly a retirement plan, using a health savings account and seeding that account with employer funds is an additional way to provide benefits that can be used to help with retirement. From a pure tax efficiency standpoint, HSA funds are more valuable to employees if saved and used in retirement.Untitled design (2)-1

After all, they are completely tax-free. If the employee funds the HSA, the employee is entitled to a tax deduction, whereas if the employer funds the account, that funding is tax-free. The funds grow tax-free and when spent on medical costs (and on some other limited options as well) in retirement, they are spent tax-free. That makes them an enticing retirement-type option. But they are available if needed for current medical expenses as well – and unlike other types of retirement vehicles, can be used currently on medical expenses without tax or penalty and without having to jump through a series of hoops to demonstrate the need (albeit documentation for the IRS stating there was a medical need is required).

Another retirement plan that is also tied to medical expenses is a retirement HRA. These are relatively rare but can offer an employer another tax-advantaged option to assist employees over the long term pay for medical expenses in retirement.

Any benefits like these help demonstrate an employer’s investment in employees and their futures, which, in turn, fosters greater workplace loyalty.

Flexible Work Arrangements

Workplace flexibility, flexibility in the sense of both time and location, has become another important issue for employees. That trend had already begun, but the response to the pandemic accelerated those desires. The surveys seem to show different details around those demands. A Gallup survey found that 91% of workers who worked from home at least some of the time during the pandemic wanted to retain that perk indefinitely. Separately, according to a Randstad survey, nearly a quarter of employees (24%) said flexible working hours are the most important employee benefit. On the other hand, a report in the Wall Street Journal indicates the converse – that flexible hours are more important than a flexible location. Nevertheless, it seems clear that if employers want to stay competitive, at least with workers who are not required to be at a certain place at a certain time, they will need to allow for some workplace flexibility, whether through flexible work hours, work-from-home arrangements, or hybrid work scheduling.

One benefit of offering flexible arrangements is that they are clearly popular, they don’t cost anything (other than the administrative costs), and there aren’t any compliance obligations associated with these policies. The employees do not have any tax issues, so if this works for an employer and the employer’s workforce and culture, it can be a powerful option for employees.

Personalized Well-being Resources

Personal well-being has never been more important to employees than during the COVID-19 pandemic. This makes sense given that the pandemic exposed and worsened issues, including financial insecurity and mental health problems.

Some employers are expanding their voluntary benefits to help workers deal with these types of issues. They include various types of additional quasi-medical coverage such as critical illness, or accidental death and dismemberment coverage, supplemental life and disability, or other coverages that are tailored to the individual employees. These benefits are typically elected by the employees that want them and are not subsidized by the employer. They generally do not require a lot of additional compliance obligations on the part of the employer but do not offer tax benefits to the employees.Untitled design (3)-1


Choosing the right employee benefits for a workplace can be a tricky decision. Employers must weigh employee desires against benefits budgets and operational objectives. Yet, despite potential challenges, providing meaningful benefits is certainly worth the effort. In this unprecedented labor market, an employer’s benefits offerings can be the difference between a satisfied workforce and a great resignation. 

Reach out to World Insurance Associates, LLC to discuss benefits options that are right for your unique workforce.


Creating a custom benefits package is critical for companies of all sizes.

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