When your health plan renewal raises costs just as employees ask for a stronger 401(k), it can feel like two competing budget decisions. But employees don’t necessarily see them as separate line items. They see the overall value of working for you, and whether their benefits help them feel secure today and prepared for tomorrow.

We help employers connect health insurance and retirement benefits into one thoughtful retention strategy. By reviewing costs, plan design and employee needs together, you can make more confident choices about where your benefits dollars go. The goal is a tailored package that supports your people while keeping your business’s costs sustainable.

Employees experience benefits as one package

A health plan can help employees manage care and unexpected expenses. A 401(k) can help them build long-term financial security. Together, they communicate that your organization is thinking about employees’ needs across different stages of life.

Research supports the importance of looking at the whole package. In its 2024 survey of U.S. employees at medium and large private-sector employers, WTW reported that 54% stayed with their employer because of its benefits package, while 40% said they would leave for better benefits even without a salary increase. Survey findings don’t guarantee that any one benefit will prevent turnover. They do suggest that employees notice benefits, and that a package meeting their needs can strengthen the reasons to stay.

That’s why it helps to discuss health and retirement together, rather than presenting them as unrelated options during enrollment. Employees may compare premiums, deductibles and provider access alongside the employer’s 401(k) match and opportunities to save. Clear explanations help them see what the full package offers.

Start with a shared view of cost and value

We review the health plan and 401(k) side by side to help you understand the full employer commitment. Start with your current annual costs: premiums and contributions for health coverage, retirement-plan administration, any employer match, and the costs of communicating and supporting each benefit. Then look at how employees use the plans and where they report unmet needs.

This does not mean moving money from health coverage to retirement, or the reverse, without considering the consequences. A lower-premium plan may have higher deductibles or other cost-sharing that employees experience directly. A generous retirement match may be less effective if employees can’t afford to contribute or don’t understand how it works. The right balance depends on your workforce, budget and priorities.

Review options together. Can you make health coverage more cost-effective while protecting access and affordability? Could a modest, clearly communicated retirement contribution fit the budget? Would better enrollment guidance help employees make greater use of benefits you already offer? Our employee benefits team can help assess health insurance, 401(k) options and related employee benefits as part of a broader plan.

Consider SECURE 2.0 credits when evaluating a 401(k)

For eligible small employers, SECURE 2.0 tax credits may reduce the cost of starting a retirement plan. The IRS describes a startup-cost credit for certain employers with 100 or fewer employees who received at least $5,000 in compensation in the preceding year. Other conditions apply, including rules relating to plan participation and whether a substantially similar plan existed during the previous three tax years.

For employers with 50 or fewer employees, the startup-cost credit can cover 100% of eligible costs; for employers with 51–100 employees, it can cover 50%. The credit is subject to limits, including a cap based in part on the number of eligible non-highly compensated employees. It may be available for up to three tax years. Qualified costs can include setting up and administering the plan, as well as employee education. See the IRS overview of the retirement plan startup-cost credit for eligibility and current details.

A separate SECURE 2.0 credit may apply to certain employer contributions, such as matching or nonelective contributions, made to eligible employees. Its amount and duration depend on plan and employer circumstances. Some employers may also qualify for a separate credit for adopting an eligible automatic-enrollment feature. These credits have specific requirements and do not make every plan or contribution eligible. Review the IRS Form 8881 information with your tax professional before including potential credits in your budget.

Credits can make a 401(k) more affordable to establish or expand, but they aren’t a substitute for a sustainable design. We help you consider the plan’s ongoing costs, the contribution employees may value, and how the retirement option fits alongside health coverage, so your decisions rest on realistic numbers.

Use health plan design to inform retirement contributions, and vice versa

Health plan design affects more than the employer’s premium. It also influences employee payroll deductions and out-of-pocket exposure. When reviewing renewal, consider the full impact of plan options, employer contribution levels, provider access and employee cost-sharing. A plan that lowers the employer’s premium but puts more pressure on employees may not support your retention goals.

Likewise, a 401(k) contribution is one part of the total compensation picture. A match can be valuable, but employees also need a plan they can understand and afford to use. Consider eligibility, the match formula, payroll integration, vesting, enrollment support and financial education. A straightforward design can make the benefit easier to explain and easier for employees to act on.

We help you compare these choices as a connected budget, not as an isolated search for savings. Our cost-containment services can help you assess health-plan spending and plan design while keeping employee needs in view. Savings in one area may create room for investment in another, but both the employer cost and employee experience deserve careful review.

A practical sequence for this year

The timing of your health renewal and open enrollment can shape how smoothly you coordinate decisions. Use this sequence to get started:

1. Set your goals. Identify the retention challenges you want benefits to address, such as difficulty recruiting, rising turnover, employee concerns about health costs or low retirement-plan participation.
2. Review your workforce and budget. Look at benefit participation, employee feedback and current employer costs. If you’re considering SECURE 2.0 credits, ask a tax professional to confirm eligibility and the applicable rules.
3. Start retirement-plan discussions early. Review plan options, administration and payroll integration before finalizing your health renewal budget. Early planning gives you a clearer view of potential costs and timelines.
4. Evaluate health plan options at renewal. Compare the financial and employee impact of available designs and contribution approaches. A plan change may require additional explanation or support during enrollment.
5. Coordinate open enrollment communications. Explain health and retirement benefits together: what the company contributes, what employees can choose, how to enroll and where to get help. Keep the language direct and make space for questions.
6. Measure what happens next. Track enrollment and participation, employee feedback and retention patterns. Use what you learn to guide the next review rather than assuming that one year’s design is right indefinitely.

Build a benefits strategy employees can understand

A connected strategy does not require a large employer or a complicated package. It requires a clear view of how health insurance and retirement savings work together for your people and your budget. With renewal and open enrollment planned as related decisions, you can offer benefits that feel more coherent, cost-effective and reassuringly thorough.

We bring a consultative perspective to that work. Whether you’re starting a 401(k), reviewing your health plan or coordinating both, we focus on your unique needs and tailored solutions. For employers in New York and beyond, we aim to be a trusted advisor and long-term partner, not just a resource at renewal time.

Contact Plan Professionals for a benefits review to look at your health insurance, 401(k) and broader employee benefits together. We’ll help you evaluate options, plan the next steps and build a benefits strategy that supports your people over time.