Question: When I first started working for my company, my health insurance was covered and they matched our contributions to our retirement by 100%. Now, 5 years later, they are asking us to pay towards our health care and are reducing their match to 10%. The additional costs are significant. Is there anything that I can do about this?
Answer: There are things you can do to offset the costs of benefits formally covered by your employer. However, I want you to do this first: Make a list of ten close friends or family members. Include only adults of working age.
Now, look at your list. Depending on where they live, their age, their education level, their ethnic make-up and whether they are male or female, anywhere from 1 to 4 of the people on your list are unemployed right now – or soon will be. So (and you may not want to hear this), the first thing you need to do is be thankful that you have a job.
Many companies structure their benefits package to facilitate recruiting efforts. Others focus on retention. Others see benefits as an important part of the compensation structure and, as a result, may implement stark differences between the packages offered to the executive suite and those enjoyed by “the rest of us”.
Understanding the rationale behind your benefits package is important because you need to know what its designers are thinking if you hope to negotiate or recommend changes. You also need to understand that any changes made will impact the entire company, so research your recommendations thoroughly and be prepared to make a business case for why they are smart and cost-effective.
Here are some suggestions that may help:
- As you examine the package, consider each element separately. Are there any elements that are costing the company a lot of money without providing real benefit?
- Look beyond your employee benefits package and examine some of your company’s other policies. For example:
- – Are managers reimbursed for expensive lunches while you and your fellow employees are coming out-of-pocket for healthcare expenses?
- – Is the company spending a significant amount in travel for meetings that can be done just as effectively online or over the phone?
- Executive bonuses are part of the recruitment process. However, those bonuses are based upon profitability and should be reduced accordingly during tough times. Are millions of dollars being paid in bonuses while you and your co-workers are sacrificing?
- The company may have had a difficult decision to make: Reduce benefits or reduce employees. If no formal announcements were made explaining the reductions, ask if this is the reason.
- Speak with your plan’s administrators. Ask if the reductions are permanent or temporary and make plans based upon the response.
- Many companies offer programs that let you make tax-free contributions to offset costs that aren’t covered by insurance. If your company doesn’t offer a similar program, suggest that they should.
(This article was originally posted on TheLoop21.com