Payroll Contribution Strategies

Question 1

Payroll Contribution Strategies

Factors Determining Employer’s Financial Commitment Towards Benefits

Answer 1

• Total Compensation Philosophy (Split between salary and benefits)
• Benefits Budget
• Benefit Competitiveness
• Collective Bargaining
• Legislative and Regulatory Issues

Question 2

Payroll Contribution Strategies

Basic Approaches for Establishing Employee Payroll Contributions

Answer 2

• Defined Benefit: EE contribution = % of premium set by ER
• Defined Contribution: ER contribution = set dollar amount, regardless of plan choice

Question 3

Payroll Contribution Strategies

Payroll Contribution Levers for ERs to Meet Objectives

Answer 3

• Income-Based Contributions = equitable distribution of costs
• Dependent Subsidy = greater level of contribution to cover dependents
• Health Incentives (like Rally)