Don't Swap Cash for Benefits - disadvantages to companies who let employers opt out of health care benefits - Brief Article

HR Magazine, March, 2001 by Lynn Miller

Allowing employees to swap health care benefits for higher pay probably isn't in your organization's best interests, say analysts at Syndicated Research Group in Baltimore, Md.

The growing interest in "total rewards" programs--which allow employees to opt in and out of benefits, as well as redundant health care coverage in two-income families--has more employees clamoring for this tradeoff.

But there are two major disadvantages for companies that take this approach:

* It makes it more difficult for organizations to predict future health care costs.

* If employees opt for cash instead of insurance, then can't afford to see a doctor, they are likely to be out sick longer.

Employers that adopt a "total rewards" philosophy still have options--such as requiring employees to carry a minimum level of health care that cannot be "traded off."

Lynn Miller is a freelance writer based in Alexandria, Va.