What Benefits Are You Actually Required to Offer — and What Does a Competitive Series A Package Include?
The legal floor for US employer benefits is shockingly low. You are required to pay Social Security and Medicare taxes (FICA), carry workers' compensation insurance, and — once you cross 50 full-time equivalent employees — comply with FMLA and the ACA employer mandate. Health insurance, 401(k), dental, and vision are all optional under federal law. None of that matters if you're trying to hire a VP of Engineering in 2026. The talent market has its own mandate, and it's stricter than the federal one.
The Short Answer
Legally required: Social Security/Medicare matching (7.65% of wages, always), workers' compensation insurance (state-mandated, rules vary), unemployment insurance (FUTA + state), and FMLA leave at 50+ employees. That's it at the federal level.
What the talent market requires to close senior hires at seed and Series A: health insurance, a 401(k) with some match, dental, and vision. Miss any of these and you're competing with one hand tied behind your back.
When the Legal Floor Is Enough
If you're pre-seed, bootstrapped, and under 10 employees — mostly founders and contractors — the legal floor may genuinely be where you operate. Workers' comp is not optional; everything else is. Some companies in this range offer no health benefits and rely entirely on equity and mission to attract early hires.
That works exactly once, and only for people who believe deeply in what you're building. The moment you're competing for a candidate who has an offer from a funded Series A company, it stops working.
Two compliance points that matter earlier than most founders expect:
- Workers' comp is required in almost every state from employee one. Penalties for non-compliance are severe. If you're on Gusto, Rippling, or Justworks, this is usually bundled.
- FMLA doesn't apply until you have 50 employees within 75 miles of a worksite. But some states have their own paid family leave laws that kick in earlier — California, New York, Washington, and New Jersey all have mandatory paid leave programs that predate federal requirements.
When You Can't Ignore Benefits Anymore
You hit the real inflection point around 15–25 employees. By then, you're interviewing candidates who ask about benefits in the first conversation. Based on a survey of 143 SaaS founders, CFOs, and CHROs, here's what the competitive market actually looks like:
| Benefit | Series A+ standard | What 72%+ of comparable companies offer |
|---|---|---|
| Health (employee premium) | 100% employer-paid | 82% pay 100% of employee premium |
| Health (dependent premium) | 50–75% employer-paid | Median: 50%; 0% at seed stage |
| 401(k) match | 3–4% (Safe Harbor) | 72% offer some match at Series A; median 3.5% |
| Dental | 100% employer-paid | 89% of Series A+ cover 100% |
| Vision | 100% employer-paid | Near-universal at Series A+ |
| Life/disability | Basic life + LTD | Standard by 50 employees |
KFF tracks national health benefit cost benchmarks annually. The 2025 average annual family premium is $26,993. At small firms (10–199 employees), workers pay a much larger share — 36% vs. 23% at large firms — which is exactly why your benefits package matters more as a recruiting signal than it would at a 500-person company.
3 Questions to Ask Before Deciding What to Offer
1. What stage are the candidates you're competing with from?
If your benchmark is other seed-stage companies, a no-match 401(k) and a $600/month ICHRA allowance may be sufficient. If you're pulling candidates away from Series B companies or late-stage startups, you need the full stack: group health, dental, vision, 401(k) with match.
2. Where are your employees located?
A group PPO from a single carrier doesn't work well for a 15-person team spread across 8 states. Nava Benefits and similar modern brokers can help you navigate ICHRA or multi-carrier setups that actually cover remote employees. The ICHRA model — where employees buy individual plans in their own state's market — solves the coverage gap that kills remote-first group plans.
3. What does crossing 50 FTEs trigger for you?
The ACA employer mandate, FMLA, and federal COBRA all activate at different employee thresholds. Model your headcount trajectory now. If you're at 38 employees and growing 20% annually, you'll hit 50 in about eight months. You need to have compliant coverage in place before you cross, not after.
What This Decision Affects Downstream
Getting benefits right at seed and Series A has compounding effects. A 401(k) with auto-enrollment drives real retirement savings rates for your team — SECURE Act 2.0 now requires auto-enrollment for plans started after December 2022 once you're past the three-year exemption period. Health plan design shapes how employees perceive total compensation and affects your ability to retain people through growth phases where cash comp may lag market.
The cost is also more predictable than most founders assume. At 15 employees, a competitive ICHRA + 401(k) setup runs roughly $139k/year all-in — versus $175k for a group PPO with equivalent 401(k). The lower option is also the better recruiting product for remote teams.
A Fractional Finance Team Can Help You Size This Correctly
The choice between ICHRA and group health, between Safe Harbor 401(k) and a SIMPLE IRA, between staying on a PEO and going direct — these are finance decisions as much as HR decisions. The wrong call can cost you $30–75k per year in unnecessary admin costs or lost FICA savings. Bridges works with Series A SaaS companies to model the full cost of their benefits stack against headcount projections, so you're not making these decisions on vibes. If you're approaching 25 or 50 employees and haven't modeled the options, that's a good time to talk.
