Employers and benefits managers struggle to balance competitive benefits packages and out-of-control costs. And, experts at Colonial Life say, public sector employers face additional obstacles from revenue shortfalls and increased public scrutiny of government spending.
In a new white paper, the benefits provider examines five strategies that have been proven to help with cost containment. Those include:
Wellness initiatives were among the top cost-control strategies implemented by employers in a recent survey of government financial officers, Colonial says.
Pretaxing benefits/Section 125 participation
Colonial Life says establishing Section 125 plans and maximizing employees' participation in pretax benefit programs is just as highly implemented and recommended as wellness initiatives. More than three quarters — 77 percent — of employers in the government financial officers survey say they offer pretax benefit plans, and 86 percent of those recommend this option. In fact, at 73 percent highly recommended, it was the most enthusiastically endorsed strategy of the survey options, and only 3 percent were unlikely to recommend it.
Benefits communication and education
Employers can transfer the cost of benefits plan communication to their benefits suppliers and can outsource an enrollment system and open enrollment management rather than maintaining these responsibilities in-house, according to Colonial Life.
One underutilized solution to the benefits cost problem is to move noncore benefits to employee-paid voluntary benefits.
Providing insurance coverage for dependents who are no longer eligible drives up benefits costs for employers. Health plan audits can reveal a significant number of ineligible participants, including dependents who are over age or who aren’t a blood relative or a spouse, or former employees who haven’t been removed from the plan. The potential cost savings offered by dependent verification can be considerable, and the service is sometimes available at no cost to the employer.