Three employer contribution approaches, compared with an example team
Compare a fixed amount, a percentage approach, and tier-based contributions using a clearly labelled example team.
In this guide · 5 sections
01
Employers structure contributions
Employers often structure contributions as a fixed amount, a share of a premium, or different amounts by coverage tier. Each approach shifts cost and predictability differently.
02
An example team of 40 employees
Consider an example team of 40 employees. A fixed contribution can make the employer budget easier to see, while employee costs vary more when plan prices differ.
03
A percentage approach
A percentage approach moves with premium changes. It can preserve a consistent sharing idea, but the employer budget may be less predictable at renewal.
04
A tier-based approach
A tier-based approach can recognize different coverage levels, but it requires clear decisions about employee-only and dependent tiers. The plan and applicable rules shape what is available.
05
Compare each method
Compare each method using your actual census and plan options. Confirm the final design with the carrier, broker, plan documents, or counsel before communicating it.
