1. Provide multiple options. Some healthcare carriers will allow you to offer as many as 30 different plan designs to your employees. This allows those who may not need as much coverage to pick a plan that costs less (thereby saving you money). Other employees who want to take advantage of the tax benefits of having an HSA (Health Savings Account) may pick a high-deductible PPO plan, which usually has a low premium. HMOs offer substantial coverage for families while keeping premium and out-of-pocket costs at a minimum.
2. Offer a “middle-of-the-road” contribution. Rather than paying for the best plan (which encourages employees to either over-utilize benefits or “waste” benefits that they never use) or the worst plan (which discourages employees from participating, therefore jeopardizing the plan), pick a plan that provides for basic coverage, such as office visits and generic prescriptions. This will allow employees who need more coverage to “buy-up” to the better plan, and employees who don’t utilize the insurance will still have adequate coverage for emergencies or illnesses, which would otherwise keep them from work.
3. Give something back. If you find a need to substantially cut your benefits contribution, add a low cost benefit such as life insurance or short and long-term disability. These group plans are very inexpensive, usually costing between $5.00 - $10.00 per employee for a $25,000.00 or $50,000.00 life insurance policy. Short and long-term disability policies pay for the 5% gap between what the state pays (55% in California) and 60% of the employee’s monthly salary. This can be substantial for your highly compensated employees. Offering this new benefit can cushion the news that you are cutting back elsewhere.
4. Show your employees what they’re worth. Employees should realize that their total compensation package includes not only their base salary, but their vacation time, paid time off, commissions, bonuses, over time, holiday pay, benefits contributions, life insurance, and tax savings from retirement plans and flexible spending accounts. Showing your employees the total compensation they receive, on paper, may help them appreciate their true value. Many employees don’t know (or realize) the actual annual cost of their benefits.

MMC, Inc. is here to help our clients with their healthcare benefits or any communication that may need to be relayed to employees. We are always available to review your options or your current plan. If you would like to discuss different ways to best maximize your employer contribution, please feel free to call the MMC Benefits Department at (800) 899-6624.

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