How Much Can I Ask Employees to Pay for Insurance?

Just imagine, you are offering a job to a prospective employee. He is perfectly suited with what you need and match up with the salary what he is demanding with your expectation. Before offering the appointment letter to him, it will be wise to discuss about how much insurance amount he would be paying after joining your organization. It comprises nearly 40%, or even more of his total compensation package. So, it is important to let him know exactly what benefits he will get.

Generally, the employer pays 75% to 100% of the total insurance cost in small business. For employees’ dependents, the employers pay 0-50% of the cost. However, you might have set a company standard of your own. So, ask him whether he/she is ready to pay the standard amount. You also need to check the law of the land as every country and state has different plans of paying the insurance provided to the employees. Taking an instance, employers are required to pay 50% of their employees' insurance cost in California (USA).

Discuss with an insurance broker; he can help you with rates and regulations. It will also bring the information of market standard rate. Make sure you understand how much benefits are providing by your company to the employee. Clear out everything before he/she finally joins the company to avoid any hassle afterwards.

Be ready to answer the following questions:

A prospective employee normally asks these following questions to their employers before joining the organization:

Is there any health coverage?
How much is the family and individual health coverage?
Is the premium deducted from his/her pay check?
How much is the deductible?
Is there review option of the health insurance plan options?
What are the restrictions and limitations?
What are the pre-existing conditions?
When will coverage begin?
When do benefits start to accrue?
What type of pension plan is there?
How much does the company contribute?
Is life insurance provided?
Does the company offer short-term and long-term disability coverage?
Are there educational and training benefits?
Is it available for my family, as well as for myself?

Discussion on this is a must after the interview, i.e. before giving the appointment letter or at the time of salary and other benefit discussion. He may not jump into an offer with lower percentage easily, so be ready to negotiate. Keep your best presentation in front of him regarding your company’s benefit plans and schemes. Memorize all benefits that you offer such as salary, fringe benefits and additional perks. Convince him that you are offering with the market standard.

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