4 Tips for Managing Employee Benefit Costs

As inflation increases the price of many goods and services, including health care, employers and employees are struggling to stretch their budgets. Most workers expect their employer to provide health benefits. And businesses want to offer the most affordable health plans possible. But they’re unsure how to best use the company’s employee benefits dollars. Review these four tips for managing employee benefit costs.

1. Offer the best benefits possible

At many companies, employee benefits are an afterthought. They prioritize business needs and designate the remaining budget for whatever benefits they can afford.

However, employees today consider benefits packages as essential as their salary. Since businesses are facing The Great Resignation, benefits are a critical strategy for keeping and retaining talented workers. So, instead of putting employee benefits at the bottom of the budget, make them a key priority. Research indicates that private businesses spend about 29% of employees’ hourly pay on benefits.

And, it’s important to note that more and more employees rely on their employers to help them navigate through health care changes. It’s not surprising that many workers worry about increasing health care costs and forego life-improving procedures and prescriptions. Employers should keep these concerns in mind as they create benefits packages with affordable plan options.

2. Work with brokers and insurance companies

Insurance brokers and insurance companies have many resources to help employers identify benefits cost savings. This whitepaper explains how to take advantage of these services.

It’s recommended that companies do a competitive analysis to identify benefits they need to attract and keep the best workers. Businesses also should evaluate their budgets to identify ways to cut costs. For example, if a benefit is not being used, drop it and spend money on a benefit that employees really want.

3. Prioritize employee health and wellness

Researchers have linked health care spending to people’s behaviors and lifestyle choices. So, educate employees on their health care expenses to help them get the most from their benefits.

For example, encourage workers to use preventive screening tests to identify potential health risks. Most insurance plans cover the cost of an annual wellness visit. Often, some medical conditions can be detected through simple routine screenings that check blood pressure, heart rate and cholesterol levels, to name a few. Catching health concerns early can help employees avoid expensive procedures and treatments in the future.

Survey workers to know the benefits and wellness programs they want. Then update your benefits packages to provide a full range of well-being options. Make sure to include rewards and incentives to encourage participation.

4. Communicate how to use the benefits

Employees rely on employers to help them understand their benefits and know how to use them. Investing time and resources to educate workers about their coverage will lead to healthier, happier and more satisfied workers. They will be more likely to use their plans, which can save them money on health care costs.

Consider these tips to communicate with employees better:

a) Develop a communications strategy to reach employees in each demographic group. Ask employees for input on any benefits they find confusing. Then use this feedback to design clear messaging and adjust it to the needs of each demographic group. Create a calendar to share messages and plan to send one at least monthly.
b) Share messages in different formats. Use a mix of traditional and digital media, such as short videos, animations and infographics.
c) Set up in-person and online chat Q&A sessions so employees can ask questions while they review their benefits choices.
d) Ask for input. Regularly ask employees to share feedback on benefits. Update coverage based on their input whenever possible and keep them informed about any changes.

Sources and References:
Harvard Business Review
Fortune
Society for Human Resource Management
BenefitsPro – Health care system
BenefitsPro – Great resignation in health care
National Association of Health Underwriters
The Balance Careers
Teambuilding