The Small Business Benefits Guide: What You Can Actually Afford to Offer

The Benefits Gap Is Closing

For years, small businesses competed for talent with one hand tied behind their backs — large employers offered rich benefits packages that small teams simply couldn't match. That's changing. A combination of new insurance marketplaces, ICHRA (Individual Coverage HRA), and modern HR platforms has made competitive benefits accessible to businesses with as few as 5 employees.

Here's what's actually on the table.

Health Insurance Options

Group Health Insurance

The traditional route. You choose a plan, employees enroll, and you split the premium. The ACA requires employers with 50+ full-time employees to offer coverage — but smaller employers often do it anyway to compete for talent.

Average employer cost: $7,000–$9,000/year per employee for single coverage.

ICHRA (Individual Coverage HRA)

A newer option that lets you reimburse employees tax-free for individual health insurance they purchase themselves. You set a monthly allowance, employees buy their own plan, and you reimburse up to the allowance.

Advantages: No minimum participation requirements, works for any company size, employees choose their own plan.

Average employer cost: You set it — common ranges are $300–$600/month per employee.

QSEHRA (Qualified Small Employer HRA)

Similar to ICHRA but capped by the IRS. For 2025, the limit is $6,350/year for self-only coverage and $12,800/year for family coverage.

Retirement Benefits

SIMPLE IRA

Designed for businesses with 100 or fewer employees. Employees contribute up to $16,500 in 2025 (plus $3,500 catch-up if 50+). Employers must either match up to 3% of compensation or contribute a flat 2%.

Setup cost: Low — most major brokerages offer SIMPLE IRAs with no setup fees.

SEP-IRA

Better for self-employed owners and very small teams. Employer contributes up to 25% of compensation (max $70,000 in 2025). No employee contributions.

401(k)

The gold standard. More complex to administer but offers higher contribution limits ($23,500 employee limit in 2025). SECURE 2.0 Act provisions have made 401(k) setup more accessible for small businesses.

PTO and Flexible Work

PTO costs you nothing out of pocket — just productivity planning. Yet it's consistently ranked as one of the top benefits employees value. A clear, written PTO policy signals that you're a professional organization.

Minimum competitive offering: 10 days PTO + federal holidays.

What top employers offer: 15–20 days PTO, flexible/remote work options, mental health days.

The ROI of Benefits

The Society for Human Resource Management (SHRM) estimates that replacing an employee costs 50–200% of their annual salary when you factor in recruiting, onboarding, and lost productivity. A $500/month benefits investment that retains one $60,000/year employee pays for itself many times over.

How Ogo Ops Helps

Ogo Ops handles benefits enrollment, tracks employee elections, and automatically deducts benefit premiums from payroll each pay period. Open enrollment periods are managed in the platform — employees log in, review their options, and enroll themselves.