Overview

Employers provide employee benefits for the purpose of achieving organizational objectives and satisfying employee needs more economically then they could individually. Therefore, the achievement of specific objectives and the satisfaction of specific needs should be driving forces behind changes to plan design and cost management.

• Diagram of human resource objectives
• Diagram of employee needs

Why even provide benefits?

• Establish a policy that deals with the financial implications of traumatic life events such an death, disability and large health claims.
  
  What if an employee can't afford medical treatment?
  What if an employee becomes disabled and has no insurance?
  What if an employee dies leaving dependents with no source of income?
  
  
• Provide tax-effective compensation.
• Attract and retain the best staff.
• Reduce stress and improve productivity.
• Improve the physical and mental health of staff.
• Build corporate culture by caring for people and improving relationships.

Why are group benefits less expensive then individual benefits?

• Preferred tax treatment of some benefits.
• Reduced distribution cost.
• Reduced administration cost.
• Spreading of risk among members that otherwise would not participate.
• Annual premium rate adjustments.

Are they worth it?

• Review the objectives and how they are being met in a changing environment.
• Track formal discussions (recruitment, initial orientation, job promotion, awareness sessions).
• Informal discussions (grapevine).
• Preform quantitative surveys (annual, voluntary termination).
• Analyze communication (claim declinations, misunderstandings).

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