What Should Your Employee Benefit Plan Cost?
It can be expensive to ensure that you attract the best employees, but you need talented employees for a successful company. It is estimated that it costs $15,500 for health benefits per employee. This may affect your bottom line. Health benefit costs are rising much faster than wages.
How can employers ensure benefits for employees while still keeping costs down?
There isn’t a singular answer to this question. Many companies and organizations are exploring different options and strategies to keep employee benefit plan costs down. You might consider meeting with a cost cutting consultant, as well. Of course, you may even re-evaluate your business tax planning strategy to figure out how to save some money on Overhead Costs that can be spent on employee benefits.
The pandemic has also affected how much companies can adjust when it comes to employee benefits. Some benefits are paid entirely by employers, while the expenses are shared in other instances. Let’s examine what your employee benefit plan should cost and how companies can reduce costs.
The pandemic has proven the need for telehealth services. However, the telehealth sector was already growing before COVID-19. After all, it costs a significant amount of money to see a doctor or to go to the emergency room. Telehealth companies have marketed themselves as an “affordable alternative”, and virtual care was already gaining popularity.
Of course, thanks to the pandemic, the telehealth sector is rapidly expanding. For example, NYU Langone’s health system saw urgent virtual care visits skyrocket over 600%. If you think that number is large, consider that nonurgent virtual care visits grew by over 4,000%.
The demand is there, and there is no question that telehealth will be integral to adjusting your employee benefit plan. 53% of employers will reportedly expect to implement more virtual care solutions, as well. Like it or not, virtual care will be part of the future of employee benefit plans.
One smart step you can take to lower costs for your employee benefits is to reward employees that are serious about their health. Your company might even decide to sponsor wellness programs. This helps your company in more than one way since healthy employees are often the best employees.
Of course, a cost cutting consultant would tell you that it also helps with health insurance costs. It’s important to reward good behavior rather than discipline any unhealthy behavior. It can also reinforce your company as an organization that prioritizes the health of its employees. A wellness program could also help improve relationships between employees.
Analyze Your Employee Benefit Plan
If you simply don’t understand how to reduce employee benefit costs, you may consider hiring someone specializing in spend analysis. It often takes an outside perspective to figure out how to cut costs. There is also a good chance that an expense reduction consultant will urge you to examine other plans to see if your company can save money. Employers can also vow to be more transparent regarding employee health information.
One popular step from many employers is to ask employees to contribute to a health saving account, or HSA. This will definitely incentivize employees to consider low premium plans and help provide some peace of mind if they ever have an accident. Of course, business expense reduction can also take place in the form of researching other providers. While switching providers may be costly, it might be an opportunity to save money or adjust to changing group health needs.
Your employee benefits are not something you can dismiss. They will undoubtedly be concerned about their health. Your company won’t be able to attract capable employees if you cannot offer enough benefits. The cost of employee benefits continue to go up, and it doesn’t seem like that trend is changing anytime soon.
Of course, companies should look to any possible way to reduce costs. It might involve researching medical providers or speaking with a cost cutting consultant. Companies in all industries should examine their overhead costs. If your organization can keep its employees benefits, that is a great sign for employee morale and attracting future talent. It can also help you retain top talent.
Expense To Profit can help your organization when it comes to business expense reduction. We can create a plan that helps you reinvest your savings into future productivity. Some cost cutting consultants might find shortcuts that can help overhead costs. We don’t believe in that approach, and we believe in saving our clients time, money, and energy. It only takes 15 minutes to get started, and there are no upfront costs necessary.
Expense To Profit is more interested in creating innovative long-term solutions. We know that healthcare costs are rising, but our experts can help.
Contact us anytime for more information.
Published by Marc Freedman
Marc currently serves as our Chief Cost Evaluator, expertly advising our client management team on how to help you successfully achieve your business and financial growth goals. A respected mentor to all he consults with, he is an avid collaborator and contributor to the spend consultant community, guiding thought leaders to formulate, design, and install the best operational solutions available to their clients.