There is no one wage level that ensures someone will, or will not, experience a net income loss due to losing public benefits. Each program has its own income eligibility thresholds. Some programs count gross pay, some use taxable income only, and in addition, factors like disability, veteran, or adult student status can impact a person’s situation.

With all these factors, finding “the Cliff” is a lot like trying to guess what a person’s tax return will look like based on salary information alone.

A family of 4 could have an annual household income of $65,000 before they lose some benefits, and over $93,000 before losing others.

We hear consistently that employees don’t tell their employer that they are about to lose a benefit with a raise or promotion due to embarrassment, fear of getting in trouble, or simply not knowing how to talk about it.  Check out this list of indicators to see Common Signs of Benefits Cliffs.

The Federal Poverty Level (FPL) is updated every year by the Department of Health and Human Services. Public benefit programs use the FPL as a reference point for establishing eligibility thresholds, copays, and other guidelines.  Some programs serve families with incomes as high as 300% FPL, which for a family of four, is $93,600 a year.overty Guidelines | ASPE

Public benefit programs typically are updated annually and provide operational memos throughout the year for any other changes.  Parsley subscribes to receive notifications for each program and updates our technology accordingly. 

Employees, and potential employees, will face the impacts of Benefits Cliffs whether they know about them or not. So they are already quitting or reducing their hours to be able to meet their out-of-pocket expenses. Finding potential cliffs helps them, and you, to find solutions.  

Many times, solutions already exist in your suite of benefits, and employees are not using them to their best advantage.  There also may be tax-advantaged benefits that best meet the needs of employees at the intersection of private and public benefits that you don’t currently offer. Ultimately, understanding what Benefits Cliffs are costing you in turnover, and other HR-related expenses, will help you make an informed decision about what is more costly to your organization: Putting resources toward addressing Benefits Cliffs or dealing with turnover and other impacts. 

Check out this list of things you can do to help address Benefits Cliffs that are free. 

We recommend engaging in our Best-fit-Benefit Strategy consulting program, so that you are not just predicting Benefit Cliffs, but can be confident that you are mitigating them.

Solving Benefits Cliffs does not mean customizing a different talent management and total rewards strategy for each employee. Rather, Parsley can help you find company-wide solutions that meet ERISA requirements and allow for the flexibility to address a wider range of employee needs.

Parsley is the only platform where employees can do the math to understand their actual income and expenses by factoring in both payroll deductions and public benefits eligibility. Parsley's role is to empower users with a robust understanding of their financial situation in order to make the best career decisions for their household.

With over 15 public benefit programs and all of the employer benefits available to them represented, we know that users will get the best answers to program specific questions if they direct them to administrators of the programs themselves.  That is why we provide easy to read articles about each public benefit program that direct users to program websites to apply, and vetted customer service numbers where they can speak to a real person. For employer-benefit enrollment and questions, we direct users to resources made available by HR or plan administrators.

It is personal! And that’s why we’ve built an Employee App that is 100% confidential. Employers do not see what situations or public benefits employees model in the app. Providing the app as an employee financial wellness benefit allows your HR team to bring up Benefits Cliffs and potential solutions generally, without digging into an individual’s situation. It also helps you create a culture where employees know they can initiate a conversation about Benefits Cliffs.