"Let's say a company pays $8,000 a head today, and the penalty to drop insurance is $2,000 or $3,000 or a substantial difference. They take the number of employees times that difference, and they generate a pool of money. With that money they say, 'We want to bolster our 401(k) match, or a profit-sharing plan, or start a variable pay plan where everyone benefits from the company's success,'" he explains.
"This could create some tremendous flexibility for creative organizations to relook at all their rewards, understand there may be a new alternative for healthcare, and decide if for them they have to sponsor healthcare," Lusk says. "If there is money saved from that, they need to show how it can be redistributed in a new way."
The problem for many companies, Lusk says, is an inability to think "holistically" when it comes to redesigning benefits structures. Employer-based programs like workers compensation, health insurance, and retirement plans tend to be looked at in isolation.
"Companies could benefit from looking at [these programs] holistically and looking at them concurrently and saying, 'Do our employees value these programs?' If there is an area that isn't that important but there is a lot of money, maybe that is the place to cut back and redistribute. It doesn't have to be about cutting costs. They can think about redistribution."
Many companies would be loath to stray from the norm and offer pay and benefits that aren't comparable with competitors. But Lusk points out that "the reasons why individuals are attracted to or stay with companies are not those transactional benefits around comp and benefits, but those relational rewards around environment, understanding the organizational strategy, communication from leadership, and learning and development." Benefits are not the main drivers in employment decisions—at least, not yet.