Employers face an ongoing struggle of trying to offer rich, competitive benefits packages while keeping benefit dollars under control. Colonial Life & Accident Insurance Company released a white paper identifying five benefit strategies that have been proven to help with increasing benefits costs. According to Colonial Life, public sector employers face increased benefits obstacles due to revenue shortfalls and increased scrutiny of government spending. The following five strategies have been proven to help with cost containment in the public sector and can be applied easily to the private and not-for-profit marketplace.
Wellness Initiatives. Wellness programs encourage the overall health of employees with the goal of decreasing health care costs and increasing productivity. Studies show that nearly 75 percent of employers supply their workforce with wellness resources and information.
Pre-tax Benefits with Code Section 125 Participation. Pre-tax cafeteria plans allow employees to pay for certain benefits with before-tax dollars. This plan structure makes healthcare more affordable by reducing employees' pay and resulting tax liability. Pre-tax cafeteria plans encourage participation through reduced tax implications. Flexible Spending Accounts offered through a cafeteria plan give employees control over their health care dollars.
Benefits Communications and Education. Communication about benefits is vital to a program's implementation and success. Employers can transfer the cost of benefits plan communication to their benefits suppliers and can outsource enrollment systems and open enrollment management instead of providing these services in-house. In the Colonial Life employer survey, 78 percent of those governmental employers who outsourced enrollment would recommend it, and 84 percent recommend using a third party to handle benefits education and communication.
Voluntary Benefits. Adding voluntary benefits provides employees with access to expanded benefits options to meet their unique family situations. Coverage is typically more affordable than what can be obtained outside the workplace. The Colonial Life study identified moving non-core benefits to employee-paid voluntary benefits as a cost containment method. There is little if any direct cost to the employer because employees elect and pay for the coverage they want.
Dependent Verification. Covering dependents who are not eligible for coverage can greatly increase costs for employers. Health care dependent audits can reveal a significant number of ineligible participants with a considerable potential savings.
Focusing on cost containment of benefits expenses can have little negative impact on employees but potential huge gains for employers. The Colonial Life Insurance survey reveals interesting opportunities for benefits savings. BAS can assist employers with each of the proven cost-containment approaches.