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Instituting Employee Contribution to Plans


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Our company has grown from 62 employees to 130 in a year. When we were at 62 employees we were more than comfortable with paying the Healthcare premiums for both our employees and their familys. It is time to change. We are moving toward requiring our employees to make a 25% contribution for families (employee only premiums will still be covered). Can anyone offer any suggestions around communication of this message. How can I expect for employees to respond?

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I think an important point is that insurance premiums have gone up n%, n%, and n% in recent years, and this is becoming a serious hardship for the company. Perhaps an example or two of how rising insurance costs have limited the company's ability to work on project A, or upgrade equipment, expand facilities, add needed personnel, etc. The company realizes that this will be an added burden for employees and wishes the changes weren't necessary. And (if it's true) add that everyone is subject to the new policy from the President on down.

When implementing the change, use payroll deductions for the employees' payment. For employees who are paid weekly, spread the employee's payroll deductions over the first four weeks each month.

You might see if you can add Double coverage, in addition to Single and Family. Double covers 2 people: the employee and spouse or the employee and one child. Typically, premiums for double coverage are significantly less than for Family coverage. Even if the employee pays 25% for it, at least it's 25% of a smaller premium.

Expect a full range of reactions. Be prepared to answer questions about why the company is doing this terrible thing to me just when I have all these other problems, and gas is so expensive. Don't panic. Gather all your facts and give them straight answers. And be thankful when (if) someone says they understand that it's not easy for the company, and they want the company to stay in business so they can have their job, even if they have to pay some for insurance.

Good luck.

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  • 4 weeks later...
Our company has grown from 62 employees to 130 in a year. When we were at 62 employees we were more than comfortable with paying the Healthcare premiums for both our employees and their familys. It is time to change. We are moving toward requiring our employees to make a 25% contribution for families (employee only premiums will still be covered). Can anyone offer any suggestions around communication of this message. How can I expect for employees to respond?

YOu may be surprised at how many employees drop the dependent coverage since the dependents are covered by the spouse's employer.

You don't mention it in your message, but you should do this thru a Sec 125 Plan to soften the blow a little for those who have elect coverage thru you.

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