Employee benefits for startups

As an owner or employer at a small startup, your employees are one of your best assets. Are you doing everything you can to attract and retain them? With the tips in this guide, you can build a standout employee benefits package for your startup that keeps top talent satisfied and excites job candidates.

Learn how PeopleKeep can help you build an outstanding health benefit for your startup team.


Attracting top talent takes more than a foosball table

Running a startup can be an exciting and challenging endeavor. As a startup founder or owner, one of the key components to ensuring the success and sustainability of your business is attracting and retaining top talent. Employee benefits play a crucial role in this process, as they can help keep your employees happy, healthy, and motivated.

While in-office perks like foosball tables, bean bag chairs, and pizza parties can help elevate your company culture, it isn’t enough to keep your employees from leaving for better opportunities.

You may think you need more financial resources to offer the same benefits as larger, more established companies. That’s no longer the case, thanks to more modern, personalized benefits solutions. Today, you can provide a competitive benefits package to your employees without the cost of traditional benefits.


Why should startups offer employee benefits?

Growing your startup takes time. There are many challenges along the way, especially for those seeking to attain unicorn status—or a valuation of $1 billion or more.

Hiring the right employees to take your organization to the next level and keeping them for the long haul is essential. However, with a highly competitive and volatile labor market, it can be challenging to sway job candidates to apply to work at a startup instead of a larger, more established company. That’s where employee benefits come in.

Investing in a competitive benefits package is the best way to promote employee retention. Employee benefits help keep your employees from leaving and improve your organization’s morale and job satisfaction. This can lead to increased productivity.

Our 2024 Employee Benefits Survey found that 81% of employees said an employer’s benefits package is an important factor in whether or not they accept a job. With a standout benefits package for your startup, you’ll struggle to hire the talent you need.


Employee benefit options for startups

Traditional benefits are expensive. Many small businesses can’t afford to offer a group health insurance plan or fail to meet the plan’s minimum participation requirements. The same goes for other benefits like wellness programs and life insurance.

The needs of employees are also changing. You’ll need to offer a wider range of benefits and additional perks than traditional benefits provide to attract the best employees.

Some of the most popular employee benefits are:

  • Health benefits
  • Paid time off (PTO)
  • Retirement benefits, such as 401(k)s
  • Employee wellness programs
  • Life and disability insurance
  • Tuition or education assistance
  • Remote work and other flexible working arrangements

While these employee benefits options are great, many organizations find that personalized benefits fit their employees’ needs better than traditional benefits choices.

With personalized employee benefits like health reimbursement arrangements (HRAs) and employee stipends, you can easily provide an affordable and flexible benefits package to your employees, no matter your business size or budget.

Health benefits for startups

Health benefits are one of the most important benefits you can offer to your employees. Our 2024 Benefits Survey found that 92% of employees rate health benefits as important.

There are many types of traditional group health plans available, from preferred provider organization plans (PPOs) to health maintenance organizations (HMOs). Small startups can also take advantage of the Small Business Health Options Program (SHOP) marketplace to find coverage and enroll in the small business health care tax credit.

However, even with these options, the rising cost and rigidity of traditional group health insurance make it almost impossible for small businesses and startups to offer it. Annual insurance renewals are also complex. If your organization can afford a plan now, it may not be able to after experiencing an annual rate hike.

Thankfully, group health insurance isn’t your only option. HRAs can help you offer flexible, quality benefits to your staff without the extreme cost or minimum participation requirements.

Health reimbursement arrangements (HRAs) for startups

An HRA is an IRS-approved health benefit that enables employers to reimburse employees tax-free for more than 200 qualifying medical expenses. Depending on the type of HRA you offer, this can include health insurance premiums and other out-of-pocket expenses. Employers set a monthly allowance that fits their budget for employees to use on medical costs.

There are two types of HRAs that employers can leverage as alternatives to traditional group health insurance:

  • The qualified small employer HRA (QSEHRA): The QSEHRA is a type of HRA available to organizations with fewer than 50 full-time equivalent employees (FTEs) that don’t offer group plans. This is the perfect option for small startups looking to offer their first health benefit. The IRS caps maximum annual allowances.
  • The individual coverage HRA (ICHRA): The ICHRA is an HRA available to employers of all sizes. With an ICHRA, you can offer your employees as much as you want in allowances, and you can customize allowances and eligibility with employee classes. Offering an affordable ICHRA allowance is an excellent alternative to a group plan for organizations subject to the Affordable Care Act’s employer mandate.

If you’re already offering a group health insurance plan at your startup, supplementing it with a group coverage HRA (GCHRA), or integrated HRA, is the cherry on top to make your plan more competitive with established companies. This allows you to reimburse employees tax-free for out-of-pocket expenses your group plan doesn’t fully cover, such as deductibles and coinsurance.

When you administer your HRA through PeopleKeep, we handle the most time-consuming tasks, like generating legal plan documents and reviewing employee reimbursement requests, so you can spend more time running your startup company.

Learn more about the HRAs PeopleKeep's platform allows you to administer


Qualified small employer HRA

A powerful alternative to group health insurance made specifically for small employers.



Individual coverage HRA

A health benefit that enables employers to cover the individual insurance plans their employees choose.



Group coverage


A health benefit that employers can use with a group plan to help employees with their out-of-pocket expenses.


More resources for startups

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Offer a personalized health benefit with PeopleKeep for a happier, healthier team

Learn how PeopleKeep’s HRA software can help you build and manage a hassle-free, affordable health benefit your team will love. Learn more about how PeopleKeep serves small employers, or book a live demo of our software. 


Frequently asked questions

Why should startups offer a benefits package?

Hiring and keeping talented employees is vital to your success as a startup, and offering a robust benefits package is a proven way to do it. According to PeopleKeep’s 2024 Employee Benefits Survey Report, 81% of employees surveyed said an employer’s benefits package affects whether or not they accept a job. 

Learn why small businesses should offer employee benefits

What are the advantages of offering generous health insurance benefits?

Fully investing in your employees' benefits isn't just an investment in your employees' health and wellness—it also has huge returns for your startup in productivity, morale, and even little-known tax advantages.

Learn why employers offer health insurance

How can PeopleKeep support my organization as it grows?

At PeopleKeep, we have personalized benefits options for organizations of all sizes. As you grow your startup, you can easily graduate from one plan to the next and even customize your benefits to employees in different states.