How can we get over the Benefits Cliff? View possible solutions below.
Employers
Employers should be aware of the benefits cliff and where the major thresholds exist.
Employers are in a position to help mitigate the benefits cliff for their employees, but they cannot do this unless they know where each program eligibility criteria generally are.
Additionally, there are several options for employers to support employees receiving benefits to navigate career growth and the benefits cliff.
Overall Take Home Pay
Solutions for Bridging the Benefits Cliff Gap
When you hear from an employee receiving benefits, the most important priority for your employees is their overall take home pay.
When an employee’s compensation does not adequately compensate for benefits, an incremental wage increase can cause a net loss in overall take home pay. In this case, in order to retain employees, employers should consider alternative ways to work with individual employees that improve quality of life to navigate over the cliff while not decreasing overall take home pay. Here are some examples of alternative ways to retain employees without impacting their benefits:
An employer could offer an employee a contribution to a health or dependent care FSA instead of a slight raise if a given employee would make use of the account and if the employee agreed to such an arrangement. In such a case, the employee’s income for benefits purposes would not rise.
Consider schedule flexibility, reduced hours (keeping overall pay the same), or increase in paid time off.
In the event of an overall net loss, alternatively could you provide lunches, provide a child care or grocery stipend, connect to other community resources (United Way 211) or bring resources (food bank, after school care) to the facility.
Benefits Recipients
As a benefits recipient, the benefits cliff will impact everyone differently. Use these tips and tools to help:
Tips and Resources
If you are currently working, don’t be afraid to take the next step in your career…Consider working with your employer to consider your hours, wage and benefits work together to determine the best path for advancement while working to get over the cliff
Upfront and open communication is always best! Talk with your caseworker.
If you need new resources to help you handle a loss in any of your benefits, give 211 a call to help you learn about the resources available to you. Additionally, some organizations have emergency financial assistance…
Check out these local resources:
- YMI Cultural Center and Self Help have teamed up to offer a class to help you navigate getting over the cliff.
- OnTrack Financial Education and Counseling offers budgeting classes and other resources to help you look at your family’s financial situation
- The YWCA offers the Getting Ahead program that can also assist you in learning how to get over the cliff and Community Action Opportunities offers case workers for individuals who are navigating the Benefits’ Cliff
Change Makers
Like employers, nonprofits and foundations are in a position to help mitigate the benefits cliff.
Awareness of the benefits cliff and where the thresholds lie is key. Nonprofits and foundations can structure programs and funds with an eye towards the benefits cliff. They might even create programs designed to target those who abruptly lose benefits.
