The cannabis industry is slowly expanding across the US, but as a whole, the industry is still in a difficult spot when it comes to providing cannabis business employees with decent health insurance and employee benefits.
Business owners for companies that are plant-touching like retail dispensaries, indoor grow operations, outdoor farms, cannabis product manufacturers, and cannabis laboratories and testing facilities may find it difficult to provide their employees with a company health insurance plan or employee benefits. These business owners struggle to get quotes, are left with substandard policies and are at risk of being dropped by their insurance provider.
Our ever-ingenious industry is coming up with solutions to this insurance and benefits challenges. In the next few paragraphs, we will explain the root of this insurance challenge, the reasons business owners should offer employee benefit packages, and where to start looking at options that will work for your business.
Why is the Cannabis industry at a loss when it comes to benefit packages?
The number of insurers offering health insurance coverage and employee benefits like dental, vision, and a 401(k) plan to the marijuana industry is limited compared to other industries. The reason for this is the dissonance between state and Federal legalization policies. Because marijuana is federally illegal and policies are continually changing, this shifting landscape has dissuaded many insurance carriers from offering plans to marijuana businesses.
A business owner who has been dropped by a carrier, or faces limited benefit package options, may decide to create a self-funded health insurance plan. A self-funded plan is where a business opens up its own checking account, which holds funds to pay employee claims, for example reimbursing an employee hospital visit. However, this option also poses challenges because large nationally recognized banks do not work with the cannabis industry. In the future, this could all change which passage of the SAFE Act, whose aim is to ensure cannabis-related businesses and service providers have access to financial services.
There are great benefit packages right now
CUE Cannabis partners with several reputable insurance providers, who have solved these employee benefit challenges and are already able to offer plans to plant-touching businesses. To circumvent the banking challenge, one insurance provider even acts as their own bank to make sure customers don’t experience gaps in coverage. In addition, there are also a few financial institutions who are happy to work with the cannabis industry.
Maybe providing an employee benefit package isn’t high on your priority list as a business owner, because it seems too difficult or expensive for your business. Yet, it is both easy to provide a package and in the long run beneficial for your business.
The Benefits of Providing Benefits
Health insurance and employee benefits for the cannabis industry are the same as any other business. It is still important to give your employees access to health, dental, vision and some form of retirement planning. Providing employees with a good benefit package obviously benefits them, but it makes good business sense too. Offering a competitive package to employees will help attract and retain good talent. In the cannabis industry, where turnover is high and comes at a huge expense to business owners, this is a smart long-term decision.
Another reason to provide insurance and benefits is because it goes a long way to improving employee health and wellbeing, which contributes to an efficient workforce. “When you are When you are providing benefits for employees you are most likely offering other things to keep them healthy,” says JS Gagnon of ThomasFinancial. “Well-being is a big part of the cannabis industry. So when you are able to provide your employees with the tools to be healthier they feel better about themselves.” In the long run, you’ll have a healthier more productive employee.
How to offer health insurance for the cannabis industry
As the cannabis industry has unique requirements, what better than a plan built specifically for the employees in this industry. There are plan options for health, dental, and vision.
The first step is to find a company that will provide insurance to cannabis businesses. The next step is to ensure that the plans that are offered include traditional PPO network solutions and HMO, as well as Referenced Based Pricing options. It is important that a business owner has options to offer their employees. The reason for this is to make sure there are plans and networks that are going to fit employees needs. It is important to give employees choice and access to quality products.
Setting up a 401K Plan for your Cannabis Employees
A 401(k) plan is the most commonly sought-after benefit by employees and relatively affordable for business owners. In principle, setting up a 401(k) as part of a cannabis company’s employee benefits is the same as it would be in any other industry. However, in practice the cannabis industry has extra challenges because cannabis isn’t federally legal and 401(k)s are federally regulated retirement plans. Since the contributions are coming from a cannabis company, the banking carrier usually won’t touch the money.
Once again, companies are finding a way around this challenge by building multiple employer plans (MEP), and having the finances managed by a separate party that takes care of all administrative tasks for the employers.
With all the legal headache of setting up a retirement plan, it is important to know that providing such long-term options to your employees can also be beneficial to the business owner because it allows them to save on taxes. A business owner choosing this option should also work with an ERISA (Employee Retirement Income Security Act) lawyer to get advice on employee benefits and labor law.
If you have questions about setting up a 401(k) plan for your cannabis employees, schedule a consultation with one of our experts who can point you in the direction of reputable providers.
Integrate employee benefits with the HR experience
Employee benefits are just one part of a business’s overall HR experience. When an employee joins a new company having a secure, paperless on-boarding experience for insurance and payroll is completely possible with modern technology.
However, an employer might choose separate carriers for vision, dental and health insurance, which makes enrollment a nightmare for employees. Yet, benefit providers may have their own portal that integrates each of these insurance options so that the employee can enroll online, select a plan online and even ask basic questions like is a PPO or HMO better for my lifestyle? Should I choose a high or low deductible? The employee can then sign electronically and complete their benefit choices. Finding a benefits provider with this type of portal makes it easy for the employee and even easier for the employer.
If you have questions about employee benefits, insurance, or financial solutions for your cannabusiness, book a no-strings-attached call to get your questions answered.