900 N. Kings Highway, Cherry Hill, New Jersey 08034
856.667.4100 · 215.563.0276 · Fax: 856.667.3652

Business Tip of the Month

Business Tip
of the Month
For the month of October 2002

Let your employees know the value of their benefits

If you provide health insurance for your employees, you're probably suffering from sticker shock. One recent study found that health insurance premiums have increased by 12.7% this year. More double-digit increases are forecast for the years ahead. As a result, you might decide to cut benefits or to pass on part of the cost increases to your employees. But how do you make the bad news more acceptable to them?

One way is to let employees know exactly how much the company pays for their benefits. Chances are they have no idea how much their benefits are worth. Ideally you'll prepare a personalized statement for each employee showing the value of each benefit. If this is too much work, you can prepare a more general statement of benefits using average numbers.

Start with health insurance premiums for the employee and dependents, showing the full cost to the company minus any employee contribution. Then itemize the cost of life insurance and long-term disability coverage that you provide. If the company matches an employee's 401(k) contributions, show that cost too. Here you can either use actual numbers based on the previous year or theoretical numbers assuming the employee makes his or her maximum contribution.

To give a complete picture, show the value of paid holidays, vacation, and sick leave. You can even include the employer's share of Medicare and social security taxes if you wish. There's no "correct" format for the statement. Use whatever format gives the clearest picture of the value of the company's benefit program.

Giving employees a benefits statement might help them understand your decision to cut benefits. It's also likely to increase their appreciation of the total benefits package your company still provides.

[Current Business Tip] [Business Information] [Home]

   
 

untitled

This site designed and maintained by the Information Technology experts at Alloy, Silverstein, Shapiro, Adams, Mulford, Cicalese, Wilson & Co.

We appreciate comments concerning our website. Contact our webmaster .