From time to time, the cost of employee healthcare benefits increases. The employer company is not always willing or able to absorb the costs and must sometimes decide to pass all or a portion of the costs on to its employees in the form of a premium increase. Businesses must notify employees promptly and effectively of increases but should remind employees of the positive aspects of group coverage to help maintain morale.

Create a header that includes “To:,” “From:,” “Date:,” and “RE:” Fill in each field. For example, the “To:” field may say “all {company name} employees.” The “From:” field may say “Human Resources” or may list a specific individual’s name. The date should be the date of the memo and “RE:” could say “Health Benefit Premium Increase.”

State that the employee contribution will increase and include specifics such as the amount of the increase, which plans are affected and the effective date of the increase. Also specify any plans that are not affected. If possible, give a reason for the increase, such as a price hike from the insurance company.

Explain any new plans or options that are available to the employee including the name of the new company and the new rates. If details of the new plans are not yet available, tell employees when to expect them.

Detail any steps the employee must take to maintain or change their insurance coverage options. If the employee must sign or complete any documents, state where the documents can be found (i.e.: the human resources department or online at a specific website).

Describe what the company did to minimize the rate change for employees. For example, if the insurance company issued a 10 percent increase and the company is paying 6 percent and passing through the other 4 percent to the employees, state this information.

Remind employees of the company’s contribution to the health insurance plan. If the company pays 70 percent of the premium for employees, say so.

Assure workers that the company values their contributions and will continue to monitor insurance options in an attempt to provide the most effective benefits package.

Tip

Give employees as much notice as possible before a premium increase so they can make an informed choice about their insurance benefits.

The person issuing the memo should either sign at the bottom of the memo or initial the "From:" line.