Changing Benefits - NEED HELP
franfields
231 Posts
Our Medical Premiums went up by a percentage. We want to absorb the increase rather than pass it along. In the past we paid a given dollar amount towards premiums, didn't matter if the ee chose employee, employee + spouse, employee + children, or family coverage.
If we absorb the increase, because it is a percentage, the dollar benefit now becomes different for each employee depending upon the category (employee, employee + spouse, etc.) they fall into. Any problem with doing it this way?
I need an answer ASAP
If we absorb the increase, because it is a percentage, the dollar benefit now becomes different for each employee depending upon the category (employee, employee + spouse, etc.) they fall into. Any problem with doing it this way?
I need an answer ASAP
Comments
To absorb the increase the employer would have to increase the employer contribution amount and keep the employee contribution amount the same.
Simple math tells me to subtract the amount the employee is currently paying for the different categories from the new increased premium to come up with the increased amount the employer will contribute now.
For example: Employer currently contributes $100 toward $200 premium = $100 employee contribution. New premium is $240, employee contributes $100 = employer contribution is now $140.
This is exactly the way we have handled increases in the past, but probably this year we will have to "share" some of the increase with our employees.