It’s hard to understate the importance of a quality employee benefits plan to attract top talent. Good benefits can help increase employee satisfaction and retention. However, the cost of a generous benefits plan can add up fast. This is why many employers are looking for easy ways to reduce employee benefits cost.
There’s no reason you can’t create an attractive benefits package on a budget. Doing so might just take some additional creativity. Smaller companies especially may be unable to overspend on benefits packages, but that doesn’t mean you need to lose talent to the competition. Below, we’ll outline some ways to create a benefit plan that works for your company’s budget and shows a way to reduce employee benefits cost.
Implement A Wellness Program
The healthier your employees, the lower your healthcare costs overall. If you have wellness initiatives in the office, it won’t just save you money – it could create a happier, more productive atmosphere overall.
Wellness programs can take many routes. You could provide discounted or free gym memberships, have periodic seminars about healthy eating and holistic wellness, or encourage early and preventative care. You could, for example, offer regular blood pressure screenings or free flu shots.
You can also offer ways for employees to cut back on unhealthy habits. Many companies, for example, offer smoking cessation programs or workplace weight loss programs.
Educate Employees On Their Benefits Options
Most plan providers are happy to come in and educate employees about the benefits and drawbacks of various healthcare options. If your employees know how to be cost-savvy when picking a plan, this savings is passed along to you.
This is especially important if you have a younger demographic. Younger people typically don’t spend as much on healthcare, so they may not have a need for more costly plans. Understanding how to work the system to their financial advantage will benefit your employees and your company.
Consider A High Deductible Health Plan
A high deductible health plan (HDHP) is exactly what it sounds like – a health insurance plan with higher than average deductibles. With this type of plans, premiums are generally much lower, so it’s a good cost-saving option if you’re in a financial pinch. Employees can keep health benefits, but you can save money.
You can also simply offer an HDHP as one of many plan choices for employees. While not everyone will benefit from an HDHP – especially those with chronic health conditions – some employees may prefer it if they’re paying a portion of their own premium.
If you do switch to an HDHP, however, make sure you educate your employees ahead of time. The more employees know about their benefits, the better. When used correctly, an HDHP can actually be a positive change.
Offer Voluntary Benefits
Voluntary benefits – which are usually funded entirely by employees – can help provide a buffer for employees who need it, especially if you downsize to a slimmer healthcare plan. They’re also a way to create a more attractive benefits package at no extra cost to your company.
Critical illness and hospital indemnity as well as accident insurance can be good supplements to HDHPs and other lower cost health coverage options. If you need to cut costs elsewhere, it’s highly recommended you look into voluntary benefits as a cushion.
Consider Healthcare Plans With HSAs
A health savings account (HSA) allows you to pay for medical expenses on a pretax basis and can only be used in conjunction with a HDHP. When employees put away untaxed money in an HSA, they can use it to pay for things like deductibles, copayments, coinsurance, and other medical expenses not covered by their main health insurance plan.
An HSA can be a good way to cut costs via HDHPs without financially burdening your employees with high healthcare costs. As always, if you opt to switch to HDHPs with supplemental HSAs, make sure your employees fully understand the process so they can make a smooth transition.
Try Tailored Networks
Consider tailoring your offerings to your employee’s location rather than a full network. Offering small network PPOs and HMOs still allows your employees to gain access to affordable healthcare, but reduces premium costs overall.
This works best if your employees are all around the same area, however. For a remote, spread out company, it may not be a viable option.
Have Employees Contribute
For small businesses especially, it’s not uncommon for employees to cover some of the costs of premiums. Even if your employees are only paying 10% to 20% of benefits costs, it will still save you a lot of money. This way, you can provide a robust benefits package without overshooting your budget.
In addition to basics like health insurance, employees can contribute to benefits such as dental and vision insurance, disability insurance, life insurance, and retirement savings plans. Again, an attractive benefits package entices top talent, and the more you can offer the better. Cost sharing can help you provide more for your employees at a lower overall cost.
Employee benefits will always cost your company some money, but they’re definitely worth the investment. Employees who are satisfied with their benefits package are more likely to stick with your company long term, and high turnover rates can cost you a lot of money.
While there are many ways to reduce employee benefits cost, education is always key. The more employees know about their benefit options, the better equipped they’ll be to make the right choices for their health and well-being.
If you need extra help finding a benefits package within your budget, our brokers are dedicated to working one-on-one with every client to assess your needs and direct you to the best possible options. Insurance can be complicated, but we’re always here to help walk you through it. Reach out here to schedule a consultation.