As a business owner or manager, you’re looking at every opportunity to reduce costs. However, it can be difficult to strike line-items from the ledger without knowing the repercussions of those changes. For example, your employee benefits program is complex, and while you want to save money, you want to do so without impacting your team.
While the Bureau of Labor Statistics can track what companies generally offer, only you can make choices that are specific to your financial situation. Use these tips to reduce the costs associated with your benefits program, remembering that you can make these changes with the assistance of our employee benefit experts.
1. Review Program Usage
You should take the time to assess how much your programs are actually used. Like many businesses, you will find that certain aspects of the benefits package are not impacting the staff—hence, they aren’t using them. This could be anything from free memberships at the gym in your building to a massage program in the office, wellness circles, etc.
In short, if you’re paying for it and no one is using it, there’s no value in that program for anyone.
Next, look over the insurance plans you’re subsidizing. If you’re spending extra money to offer a unique insurance program that no one has chosen, you can eliminate it and save money.
This entire analysis is a simple “supply and demand” review. You can supply what employees demand and cut costs where there is no demand.
2. Try Not to Over-Insure the Team
You might think, “there’s never too much of a good thing.” However, you cannot over-insure your team and make the program cost-effective at the same time. Let’s say your company offers a high-cost plan that eats away at funds allocated for contributions. These plans cost your employees a lot, and they’re not doing your ledger any favors.
You can tone down your insurance offers, give the staff something that makes sense for their budgets, and save some cash on the back-end. More often than not, this problem occurs when you choose a “pre-packaged” benefits program that doesn’t offer any savings for the group.
3. Promote Quality Healthcare Plans
Don’t be afraid to promote quality healthcare plans to certain segments of your payroll. For example, you can promote a high-deductible health plan to employees who rarely use their health coverage. Premiums are low for everyone involved, and the company saves money.
On the other hand, you may want to promote so-called “silver plans” that are affordable and offer quality coverage without overdoing it. Remember, members of your staff may opt into expensive or “gold” plans, not realizing how similar they are to lower-cost programs—at a significant monthly expense.
When you explain these health plans to your staff properly, they can make better choices, pay lower premiums, and reduce the amount of your contributions.
4. Go for an HSA
When you offer health insurance plans that tie into health savings accounts (HSAs), you are reducing costs for everyone. Your employees can contribute an amount with which they are comfortable. Plus, these plans often come with lower premiums for your employees and your business.
5. Reduce and Defer Retirement Contributions
Reducing or deferring retirement contributions is not a long-term solution. However, it can be helpful as a stopgap measure, used to put money back in the coffers during tough times.
Remember, reducing these contributions can help the business survive, and when you thrive again, you can put all that money back. If you defer payments, simply do the math, determine how long the deferment will last, and explain the change to your employees. You must also generate a plan to replenish those funds in the future.
6. Lower Administrative Costs
Reducing administrative costs can be difficult. However, there’s no need to hire a massive team just to administrate your healthcare plans. The HR staff have enough to do, and there are online portals, automated programs, and self-service options that reduce the cost of administering benefits programs.
When you take many of these tasks out of the hands of the HR team, you regain manpower that was lost, saving the company money and increasing productivity.
Contact Martinelli Benefits Advisors for Help With Your Benefits Package
Contact Martinelli Benefits Advisors today when you need assistance with your benefits program. You may want to make a change, adjust your offerings, save money, or a combination of the three. We’re happy to review your program, design a new benefits package, and ensure that your business can efficiently provide your team with the perks and benefits they so richly deserve.