Benefits for a Fully Remote Small Business
Benefits for a Fully Remote Small Business
Let's be honest: small business owners running fully remote teams have a lot on their plate. Between juggling payroll, project deadlines, and customer service, spending hours figuring out employee benefits might feel like a luxury you can't afford. But here’s the kicker—offering the right benefits isn’t just a nice-to-have; it’s a competitive advantage, especially when your team is scattered across different states.
Why Benefits Matter for Remote Small Businesses
Ever wonder why some startups attract stellar talent even with modest salaries? It's often because those companies offer benefits that truly matter to their employees. For remote workers, health insurance across multiple states, flexible perks, and support for home office needs can make or break their commitment.
Think about it: your best candidate is debating between your gig and a bigger company’s offer. If you can provide affordable, customized benefits, that's a huge plus—especially if you get creative beyond the usual health plan.
Health Insurance for Remote Workers in Different States
When your team is spread out, the usual group health insurance plans that work for local offices often fall short. Offering a one-size-fits-all plan across state lines? It’s tough and usually expensive.
That's where alternatives like QSEHRA and ICHRA come in. These are health reimbursement arrangements that small employers—yes, even startups—can use to reimburse employees for their individual health insurance premiums, including plans they buy on HealthCare.gov or other state marketplaces.
QSEHRA (Qualified Small Employer Health Reimbursement Arrangement) allows small businesses with fewer than 50 employees to provide tax-free reimbursements for medical expenses and insurance premiums, up to a set annual limit. ICHRA (Individual Coverage Health Reimbursement Arrangement) is newer and a bit more flexible, letting employers tailor reimbursements based on employee classes, such as full-time remote employees versus contractors.
So, what’s the catch? You have to make sure employees actually purchase individual health plans themselves, but the upside is that you avoid the complexity and cost of traditional group insurance. Many remote employees appreciate the freedom to pick plans that fit their unique situations and states.
How Much Should You Budget?
Rule of thumb: benefits usually run somewhere between 5-10% of your payroll. If your business is small and the workforce distributed, you can start on the lower end by leveraging HRA tools and non-medical perks before scaling to full-blown group plans.
Benefit Type Estimated Cost (% of Payroll) Typical Example QSEHRA / ICHRA reimbursements 3-7% $300-$500 per employee / month Non-medical perks (home office stipend, mental health apps) 1-2% $50-$100 per employee / month Paid Time Off (PTO) and bonuses 1-3% PTO days instead of ping-pong table
Making Benefits Affordable: TAX Credits and Government Programs
Sound too good to be true? Here’s a little secret: The government wants to help small businesses afford health benefits, especially when they have under 25 full-time employees.
One way to reduce your health insurance cost is through the Small Business Health Options Program, known as SHOP. The SHOP Marketplace sometimes offers tax credits up to 50% of your contribution toward employee premiums if you meet certain criteria, including average wages under $57,000 and at least 2 full-time employees.
Combining SHOP’s tax credits with QSEHRA or ICHRA reimbursements can bring down your benefits budget even further. It’s all about layering tools smartly to avoid overpaying.
Common Mistake: Ignoring What Employees Actually Value
Big companies often push expensive benefits that employees barely touch—like premium gym memberships or fancy commuter benefits. Remote workers especially value flexibility and practical support.
Ever conducted a simple survey asking, “What benefits would make your remote work easier?” You might be surprised. The answers often include:
Home office stipend for better gear or faster internet. Flexible PTO policies that accommodate diverse schedules and time zones. Stipends for professional development or subscriptions to tools that improve workflow. Mental health access through apps or teletherapy support.
Ignoring these preferences is throwing money away or worse, losing valuable employees to https://www.workast.com/blog/affordable-employee-benefits-options-for-small-business-owners/ companies that get it.
Affordable Perks that Make a Big Difference
Not everything needs to cost a fortune. Some low-cost benefits can have a surprisingly high impact on morale and retention:
Home Office Stipend: A monthly or one-time stipend ($50-$150) helps employees set up ergonomic workspaces. It’s simple and directly improves productivity and comfort. Team Collaboration Tools: Platforms like Workast, a project and task management tool designed for teams, can make distributed work less stressful and more connected. Flexible Scheduling: Control over when to work beats rigid 9-to-5, especially when your team spans time zones. Recognition Programs: Everyone likes to feel appreciated—spot bonuses or shoutouts at virtual meetings go a long way.
Putting It All Together: Simple Steps for Small Remote Businesses
Survey your team. Ask exactly what they value—health benefits, home office help, mental health, or time off. Explore QSEHRA and ICHRA options. These are great ways to help pay for individual health plans across states without the administrative chaos of group insurance. Check eligibility for SHOP tax credits. Visit HealthCare.gov’s SHOP section to see if you qualify to save money. Budget realistically. Around 5-10% of payroll can cover a basic to moderate benefits package when chosen carefully. Add meaningful non-medical perks. A $100 home office stipend plus tools like Workast can make your team’s day easier for far less than fancy office perks. Communicate clearly. Explain benefits in simple terms and help employees access reimbursements and marketplaces.
Final Thought
Building a benefits package for a fully remote small business doesn’t have to be complicated or break the bank. With smart use of tools like QSEHRA and ICHRA, leveraging government tax credits through SHOP, and focusing on what your employees truly need, benefits can be your secret weapon to attract and retain great talent—even if you don’t have a giant HR department or endless budget.
Skip the cookie-cutter plans and the costly extras nobody uses. Invest in what works—and watch your remote team thrive.