How much should you contribute toward your employee’s health insurance premiums?
About 1,000 people a month come to our website looking for the answer to this question, so I thought I’d address it here.
The short answer is “as much as possible,”...and I say that for two reasons:
1) If you’re financing and procuring healthcare effectively, benefits are the most affordable way to attract and retain talent --- you don't have payroll taxes on benefit contributions.
2) If you're eliminating the waste in your health plan, you'll be in a position to pay 100% of the premium and have given your company a serious advantage in the war for talent.
Imagine being able to close the interview process by saying, “By the way, unlike most companies, we pay 100% of your health insurance — so you don’t even have to think about it”.
Talk about differentiating yourself from most companies who try to contribute as little as possible.
Now, all of this is under the guise that you are procuring healthcare effectively. What does that mean?
Most companies waste 25% of what they spend on healthcare because they
1) If you’re financing and procuring healthcare effectively (hint: most companies don't), benefits are the most affordable way to attract and retain talent --- that's because you don't have to pay taxes on benefit contributions.
Once you start solving those problems, you'll be in a position where you can afford to pay 100% of the premium.
And just a reminder, you’ll never achieve those things unless — you’re working with a non-commission-based benefits consulting firm that works for YOU —- not the insurance companies.
Why? Because brokers make more money when your costs go up --- not down.
That being said, brokers aren't in the business of reducing healthcare costs.
If you want to learn more, go to our website and download our new buyer’s guide at www.healthcompassconsulting.com
How Much Should You Contribute To Your Employees Health Insurance Premiums?
