Questions to help determine what contribution strategy is most beneficial for your organization
Employee contribution strategies are an important part of your benefits strategy and are at the forefront of annual renewal conversations with plan administrators and brokers.
The task of coordinating a benefits program that is in line with your companies total rewards strategy all while managing annual premium increases is ever challenging. To mitigate these challenges and costs, most companies evaluate their employee contribution strategy to find ways to shift costs.
An employee contribution strategy is simply the dollar amount an employer pays towards their employees’ healthcare coverage, and how it is structured.
Below are questions to consider with your broker when evaluating your employee contribution strategy.
- Is it our organizational goal to transfer risk or to absorb it?
- How do we want to shift costs and where?
- Should we place more financial responsibility on employees?
- Do we have a strategy to engage employees in wellness initiatives and offer incentives to those who successfully complete them?
- Do we want to drive enrollment into a certain plan (such as a high-deductible health plan)?
- Do we want to shift more costs to spouse and dependent tiers rather than those enrolled as single?
- What is our strategy for attracting and retaining talent as it relates to the cost of benefits to employees?
- Are plan changes increasing our employees out of pocket expenses?
- What is our messaging to employees around our contribution strategy?
- Are we open to moving away from a traditional contribution strategy and moving toward a defined contribution?
It’s critical to focus on employee education around contribution strategies during open enrollment. Through communication and education employees should gain a strong strategic foundation to create certainty and understanding around the important issue of cost and the company’s goals for offering health benefits.