Mitigating the Rising Costs of Benefits

Mitigating the Rising Costs of Benefits

by on 27 Oct, 2016

In last week’s blog post, we discussed the factors contributing to the rising cost of healthcare. Escalating health insurance premiums pose a real threat to employers, since providing enticing benefit packages is an important factor in employee satisfaction and retention. While small businesses are at a disadvantage when compared to their larger competitors, there are still a few strategies that employers can adopt to help mitigate the rising costs of healthcare.

  • Encourage wellness and preventative care. Adopt a company culture of health and wellness that includes employee wellness programs and education.
  • Use a high-deductible health plan. High deductible health plans hold employees accountable for thinking about costs. Offering a high deductible plan is one way to provide adequate coverage while still controlling costs. Combining such a plan with a health savings account (HSA) is beneficial, as they allow employees to use pretax money to pay for uncovered medical costs, and the unused funds roll over to future years.
  • Offer flexible spending accounts (FSA). FSAs allow employees to use pretax dollars to pay for uncovered medical expenses. Specialized debit cards can be used for prescriptions or co-pays that are not covered by the insurer, and the money is deducted from pre-tax funds that employees have set aside through payroll deduction.
  • Perform an audit of dependents that are covered. Employees should be able to provide documentation proving that each spouse and/or child on their benefit plan is indeed related to them. Some employees may have added a domestic partner and/or their child to the plan. Conducting an audit may not be received as well by employees who are hiding something, but it can save a company a lot of money in the end
  • Consider obtaining benefits through a Professional Employer Organization (PEO). PEOs aggregate their clients’ employees together when purchasing employee benefits, giving smaller companies the leverage of a big business with access to more robust and competitive benefits offerings. This not only helps to lower costs now, but can also stabilize your rates in future years.

Managing the rising cost of employee benefits is critical to the financial success of your business, however it can also be very time-consuming and complicated. Small business may find it daunting to decipher the best options, trying to balance affordability and employee satisfaction.

As a PEO, Navigate can offer small businesses a more affordable, and stress-free solution to providing benefits.  With Navigate, your employees have a choice of multiple health plans offered by leading carriers, top-tier dental, vision and life insurance, short and long-term disability, a 401(k) and much more.  You can choose to offer it all, or just a few select benefits; it’s up to you.

If you’re interested in learning more about how a PEO can help you manage the rising costs of employee benefits, please reach out for more information or a free consultation!

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Disclaimer: this article does not represent expert advice and is provided for informational purposes. Please get in touch if you would like expert HR advice.

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