What is Benefit Termination Letter and How to Create One?

What is Benefit Termination Letter and How to Create One?

If you are an employer who plans to change the benefit terms for your employees, you need to provide benefit termination letter. It is used to notify employees that some benefits cannot be applied for any longer under the company’s package. Here’s how you can write one.

42 Benefit Termination Letter

What Is Benefit Termination Letter?

The termination letter of benefits informs the employees that the provided cash and some services as before. Whatever benefits that have been disclosed within the company policy may be rearranged and negotiated back. Some of the most common benefits to be terminated are health insurance coverage, severance support, and job seeking assistance.

What Happens When Employees Are Terminated?

Termination of employees and termination of benefits are different. When the employee is terminated, then the relationship between them and the company is put to an end. The responsibility of employer upon the employees is also being stopped entirely. However, when it’s only the benefit that’s being terminated, it’s only some of the employer’s responsibility that being cut.

How Do I Write a Benefit Termination Letter to an Employee?

Within the termination letter of benefits, you must include the date of termination, the new terms after being changed, the current resources that available, and the contact information in case they want to discuss some things after rearrangement.

The benefits usually cover the family of employee as well, that’s why termination issue must be addressed carefully in the letter, with understanding and sensitivity.

When Should I Use Benefit Termination Letter?

Anytime the board of director plans to change the benefit, they should explain it in detail by using benefit termination letter. That way, the employees can know what to expect. They should understand which of their extended rights are affected by the changes of plans.

Termination of Benefits Sample Letter

The best termination letter of benefits should be clear and easy to understand, and cover every relevant detail. Here is one example to see, so you know how the format and wordings typically go.


Dear Mr./Mrs./Ms. (Name)

This letter is sent with intend to officially inform you about changes that have been made. Starting from December 2, 2020, the company will not be able to cover your extended medical insurance as well as your dependents’.

The reason behind this decision to terminate the benefit is because our company has undergone severe financial damage on the last two quarters. The accounting department has created a detailed assessment over our employees’ insurance and gives us recommendation. It is with a deep regret that we can no longer serve this benefit that can be helpful for a lot of staffs, but for the mean time it’s seen as the best solution.

If you’d like to ask any question regarding this particular matter, please contact us directly, through phone call, or via e-mail.


(Your name)


How the benefit termination letter is arranged may have significant impact on the employees, such as their productivity. It’s surely not a matter to be considered as lightly and the tone within your letter must reflect the seriousness.


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