According to HR professionals, providing competitive benefits packages to employees is one of the top concerns for major companies. In fact, the top two biggest challenges that major companies face include controlling the cost of employee benefits while still attracting and maintaining a competitive workforce. According to a survey conducted by Arthur J. Gallagher & Co., many of the nation’s top organizations are not ready to face the challenges of a changing employee benefits market. It is only if these companies are able to adapt to those changes, however, that they will be able to mitigate their future costs. There are a number of strategies companies can employ to help control the cost of providing benefits for their employees. Increasing employee plan contributions and increasing deductibles are the top two strategies. Next comes an increase in out-of-pocket maximums followed by an increase in copayments. Essentially, the key to keeping benefits costs low is to increase the cost of those benefits for the beneficiaries – making employees pay a greater percentage of the monthly and out-of-pocket costs. It is difficult to strike the right balance, however, between reducing company costs and maintaining a competitive benefits package that attracts new employees and encourages current employees to stay onboard. Consider once a year contribution into employee health savings account. This encourages consumerism. Find out what procedure cost and shop and compare. Telemedicine has shown 2.2 fewer PTO per employee and saved on average 37.2% in Primary Care and Urgent Care/ER visits. Some of the most successful companies in the country offer a number of different benefits for their employees that aren’t limited just to health insurance plans.
Many companies offer 401(k) plans, often matching employee contributions. Other companies offer wellness programs, though the budget for these programs is often very low – less than $10,000 in 61% of cases where it is offered. Though many companies offer benefits packages to their employees, relatively few have actually calculated the financial impact that recent healthcare reforms will have on the cost of those packages. According to a survey of 1,800 companies, only 31% of those companies had made these calculations. Furthermore, only 10% had created a benefits plan or rewards plan with measurable objectives. Recent changes to the healthcare system and to the benefits landscape will pose a complex challenge to employers for many years to come. Only those companies which are able to strike a balance between meeting needs of their employees while also considering what is best for the company will survive. There are a variety of different ways that a company can go about reducing its benefits costs without laying off employees by the dozens. While strategic layoffs are an important part of any business model (in order to eliminate weak employees and to make room for stronger ones), there are other ways to cut costs. In fact, large layoffs can cost the company money in the form of severance packages, legal fees, and reduced productivity – all of these fees are on top of the cost of training new employees.
Some examples of these methods include:
• Raising monthly contributions for employees for healthcare
• Implement defined contribution program
• Raise deductibles
• Encourage consumerism
• Consider Private Exchange
• Electronic and person to person enrollment options
• Embrace Technology – Platforms are becoming available for smaller companies
• Add Telemedicine – Employer paid or Voluntary – Might consider employer paid when raising deductible and employee contribution amount.
• Develop wellness program that works
• Add Ancillary benefits as Voluntary
• Streamline HR department with benefits partner
• Extending unpaid vacation and holiday time
• Offering four-day work weeks to employees
• Cutting overtime pay and reducing work hours
• Reducing coverage for employee travel benefits
• Reducing fund-matching for contributions to retirement plans
• Offering voluntary furlough to employees
• Shutting down the business for several days at the end of each year
In addition to making some of these changes to the benefits package in general, companies should also take the time to evaluate their health insurance plans. Companies should shop around for different rates because different companies may offer discounts if you have a certain number of employees that want to use the plan. Instead of making additional benefits like life insurance and accident coverage standard, make these voluntary benefits that employees can elect to receive in exchange for a monthly contribution. Consider self insurance with stop/loss if your company is large enough. Implement online enrollment and tracking for increased participation and engagement. Tools are becoming more common to smaller companies. Just make sure that you communicate clearly to your employees any changes you make to their benefits packages. Another useful way to reduce your healthcare costs is to start offering wellness programs as part of your benefits packages. Encouraging your employees to receive health risk assessments and to engage in preventive care can reduce your overall costs for healthcare – people who are healthy use less of their healthcare benefits which saves you money.
Healthier employees will also miss less work which means more productivity for the company. It may not even cost you anything to add these benefits – some fitness centers are glad to offer discounted membership rates for company groups. Offering a Health Savings Account (HSA) to your employees is another way to ensure competitive benefits without increasing your costs. A Health Savings Account enables your employees to build up a pool of cash that they can then draw upon for out-of-pocket medical expenses. HSA savings account must be paired with a high-deductible plan. This, too has its benefits because higher deductibles mean lower monthly premiums. Also, high-deductible plans are advantageous for healthier employees because they will not need as much healthcare and therefore will not be paying as much. Consider once a year contribution by employer into employee account for approved performance. A Flex Spending Account (FSA) is another option that allows your employees to set aside money for uncovered expenses like chiropractic care, dental work, and mental health treatments. As an employer, you are able to decide which expenses are eligible for coverage and, in doing so, you can reduce your monthly. With changes to the healthcare system and the benefits landscape it is more important than ever for companies to be proactive in choosing a benefits package. Providing a competitive benefits package will not only attract new workers, but it will also encourage your current workers to stay put. If you do your research and take the time to carefully select a plan you can offer a competitive package to your employees without significantly increasing your costs.
Distributed by NetJumps International
Company Name: The Lynn Company
Contact Person: Terry Denesha
Country: United States