Employee Benefit Cost Saving Ideas

Employee benefits are one of the critical ways that your company attracts new talent, and then retains that talent for the long-term. Without a benefits package that can compete with other companies in your industry, it will be difficult for your company to be profitable. The circular problem with benefits is that they can also be a drain on profit if they are not properly administered. Some cost saving ideas on employee benefits may seem subtle, but if you have many employees, the savings can begin to add up.

Flexible spending accounts

Flexible spending accounts offer employees the ability to draw from a community fund to pay a pre-determined amount of medical expenses that are not covered by the company insurance plan.

These costs can be anything ranging from dental services to co-pays for doctor visits. Many employers also use these accounts as vision coverage for their employees. The cost savings for employers lies in the federal taxes. The employee contributions to the fund are exempt from federal income tax, and this saves the employer from having to pay the 7.65% FICA tax on each one of those dollars. If every employee contributed the maximum on these accounts, the savings to the employer could be substantial.

Health Incentives

Some health insurance providers offer incentives to employees to get involved in a healthier lifestyle. By working with the insurance providers and following their matrix for healthy choices, employees can save money on their health insurance premiums. Employers who help encourage their employees to live healthier lives by bringing in experts to speak and encouraging weight loss contests and programs in the office can also save money on the company health insurance premiums.

Freelance Workers

One of the ways to save significant money on company employee benefit costs is to use more freelance independent contractors to get work done. Independent contractors are not considered employees of the company, so the company does not need to do any tax or benefit calculations for the contractor.

The company does not need to offer benefits to an independent contractor, although some companies do. The cost savings in not paying for benefits and for the reduced administration costs of having freelance independent contractors can be well worth the investment by the company.