Why is price indicated as the number one priority most consumers indicate when shopping for insurance?
You would think the number one priority would be that it would pay out.
Maybe it's just implied that all insurance will pay out the exact same way regardless of the price?
You wouldn't assume that with any other product, would you?
I think the confusion comes from the word "insurance" itself. The word implies that you're buying protection.
Protection feels safe.
Well, this isn't really the truth, what you're really purchasing are words. Words that were crafted by the highest paid contract lawyers on the planet earth.
So when those sticks and stones, break your bones, wait till you find out what the words in your "price sensitive" insurance contract will do.
Words matter, and you will pay dearly for the addition and removal of key words when it comes to an insurance agreement.
Insurance premiums are charged based on the likelihood of the insurance company having to pay a claim. So when you say to the insurance company that you would like the cheapest possible premium, what you're really saying is: you would like to pay them a monthly sum of money, with the least possible chance that they will have to provide you anything in return.
That is a deal the insurance company will gladly make.
So when I hear people say they've had problems with insurance in the past, that's not really true. What they really had problems with was advice.
No one explained to them to true power of words.
This is one of the largest areas of miscommunication we come across when we meet with new clients.
Do you know what your staff expect from your benefit plan? Do you understand what is reasonable to provide for your staff?
It’s okay, most business owners don’t, so it’s time to let you in on the best kept industry secret.
There is no “reasonable” or “correct” way to set it up.
Side Note: The biggest beef I have with benefit plans is that employers feel like they “have” to provide it. The truth is, you don’t “have” to do anything. I truly believe that you should never make a decision you feel like you are obligated to. You need to decide what makes sense for the business.
So how do you decide what to provide?
First, you have to decide what type of staff member you are trying to attract and what is important to that person. Then decide what the company is willing to invest to attract that ideal candidate.
Keep in mind that in most cases your insurance provider is going to bill you mainly on how much your company claims so pretend that you have to pay the full amount of staff claims out of pocket.
If you are hiring for an entry level position in your company, do you feel like a reasonable expectation is to pay for all of that employees prescriptions no matter how much that ends up being?
That’s an unreasonable expectation, in my opinion.
Same goes for group retirement plans. The point isn’t to fund the employees ENTIRE retirement. It’s to help. In whatever capacity you feel comfortable with and makes sense for that position.
Now, perhaps you’re hiring for a role that is very competitive and you need to invest heavily to attract the right candidate. This is something your advisor should be able to guide you on.
So what is expected from you?
That you are clear with your staff in how your drug coverage works.
When you’re enrolling a staff member in your benefit package have your plan administrator or yourself sit down with them and explain exactly what their drug coverage entails.
You’ll find that your staff in almost all cases will be appreciative of what you offer as long as you are clear with them as to how it works.
Instead of just saying our plan covers 80% drugs, clarify:
How does your plan cover name brand drugs?
How does your plan cover generic drugs?
What can they expect when they go to the pharmacy?
What can they do if they’re currently taking a name brand drug and are worried that your coverage won’t be adequate?
Keep in mind that in most cases staff haven’t even explored or in a lot of cases knew that there were any other options then what their doctor prescribed.
By being clear and setting expectations it will allow them to have a more meaningful conversation with their doctor or pharmacist to explore their options.
We’ve had staff switch to a generic drug from the name brand they were taking and all of the side effects they were experiencing disappeared. Name brand, does not mean, the best option.
In summary, all that is expected from you is to be clear with your staff. Understand that in most cases they won’t read the benefit booklet or even open it. Set the expectations with your staff and let their doctor and pharmacist handle the rest.
If you want to go over and above expectations, provide these additional resources for your staff.
How do you deliver your drug plan?
We will be covering exactly what your administrator needs to know, how to turn them into a cheerleader and setting successful plan expectations in our webinar this month
For a copy of our plan administrator checklist click here.
If you would like assistance in understanding your plan click here
Register for Friends with Benefits Newsletter
To find out if the name brand drug you're taking has a lower cost generic that is more recommended by professionals, use this link
If your staff are currently taking any of these drugs Innovicares provides a discount card to reduce the price to the consumer.
If your staff are taking any of these drugs Abbviecares provides a discount card to reduce the cost to consumers.
If your staff are on high cost drugs and require additional coverage,The Alberta government has a program called Non-Group coverage administered by Blue Cross. They can apply for additional coverage here.
I patiently sit in the boardroom of the trucking company I had recently reached out to. Shannon (we’ll call her) seemed receptive to meeting but had informed me they “didn’t want to waste a bunch of time”. Shannon had advised me on the phone that she was frustrated with the benefit plan but management didn’t see any problem.
Whether it's virus break up or spring break up
This is the time to focus on the details; all those items on the "backburner" should now be getting moved to the to do list. Focus on all the small things that will save time, decrease hiccups and add value to your business. Here are a few to think about.
Employee Handbooks, Training, Employment Contracts
Remember that time that big project was delayed because a staff member mishandled and issue that you thought was common sense? How about that time you had an employee on leave for a month and you didn't know what your options were if you had to replace them. This is the time to solve those problems. All the little areas that bleed your company of money and productivity. Meet with your HR professional and lawyer to draft the agreements in a way that solves some of these problems. Develop the training and handbooks so that recurring issues don't keep recurring.
Your business is constantly evolving and growing, your needs are changing all the time. Your insurance policies will not accommodate this on their own. Remember that time you bought a policy to cover your overhead when your overhead was $5000 per month? What is it now? You bought a disability policy to cover your income when it was $4500 per month, what is it now? Does your group benefit policy work as well for your current staff as it did for the staff when you set it up? Take the time to make the changes you need to make now. It's much more difficult to implement these changes when everyone is working full out.
Go Forward Plan
We are reaching out to our clients and developing a go forward plan. This is where we can we plan out what we are going to accomplish in the next 12 months. It gives people clarity in an uncertain time. We ask them how they would like us to communicate with them (phone, email, text etc.) and how often they expect to hear from us. Take this time to reach out to your key contacts and do the same. Take this time to focus on the relationships that you have and build confidence in your business.
If you would like help in these areas or would just like to see what your options are, click here, we would love to hear from you.
It's loud out there..
We live in a day and age of information overload. The truth and facts have had to make way for opinions. It seems all the news that we get today are just the opinions of the people delivering it to us and a lot of times none of it is based on any research or evidence.
So how do you decipher and make intelligent purchasing decisions for your business?
Start with your Goals
The best way to know what type of advice to seek or to avoid starts with your direction. If you don't have clear direction and purpose than you're vulnerable to be sold on someone else's goals. You need to set clear goals, not just for your business but for yourself. For example, our goal is to offer the best insurance advice and products so that our clients can set the bar in their industry. But if you don't have any desire to set the bar in your industry or see any value in doing so then our goals aren't aligned.
Seek to be Educated
It's great to trust the discretion of the experts but without being properly educated in your decision it's hard to have confidence. The role of an expert is not to make the hard decisions for your but to simplify and relay that information in such a way that you can understand it and make an informed decision. Your request of an expert should be to weed out all of the industry jargon and background noise so you can focus on what's important to making your decision. Don't allow someone else to make the decisions for you or you'll just waste time wondering if it was the right decision.
Understand Where the Advice Comes From
People aren't against you; they're just for themselves. It is important to understand who stands to benefit from the outcome of your decision. It's not reasonable to assume that no one will benefit from the outcome of your decision; unless you're seeking advice from mom. However, it is reasonable to inquire as to how someone is compensated and how your decision impacts that. If you're expert is invested 100% in only one specific outcome it's going to be very difficult to trust that person to provide you with the best possible council.
In times like this it pays to be flexible and your benefit plan should be no different. We are fielding a lot of calls from clients worried about the future and unsure of what to do with their expenses.
If you're looking to squeeze out a little razor thin sliver of silver lining in a time like this, it's that you have the opportunity to review costs and make critical decisions.
We often get calls in our office because the price of someones benefit plan went up. We NEVER get a call when someone's price is going down. However, this is a tremendous opportunity for you to add value to your plan and cut your costs. Rarely do you see price decreases but when we do they're never because the insurer was just feeling charitable. Actually, its typically because your staff are using around 50% or less of what you are being billed and they have been for an extended period of time.
It often makes sense at this point to review your usage report. The objective of this review is to find underused areas of your benefit plan and see if you can better utilize those dollars. In a lot of cases, you could take something like paramedical coverage (massage, physio, chiro etc.), strip it off the plan and replace it with a health care spending account.
A health care spending account is simply a side a account that the company funds directly for the employee to use for all or specific health care related expenses. The account is given a maximum and when employees hit that maximum they are done for that plan year and the account resets the next plan year.
The major difference here is that if the employees under utilize this account, you get that money back at the end of the year instead of it going to the insurance company profit. Your employees will love the flexibility of the account and you can be happy knowing your spending your benefit dollars as wisely as possible.
The process couldn't be easier, the accounts are all managed by a third party and the only information required from you is a list of the employees you're looking to cover and the bank account you'll be making withdrawals from.
So if you would like a free report to see if there are any benefits your staff are under utilizing, feel free to reach out to us directly.
Communication is key or at least that's what my wife tells me...
So why aren't your professional advisors talking with one another? Everyone has professional advisors in their lives. Whether it be your financial advisor, your lawyer, accountant, group benefits consultant or even a parent or spouse. These advisors are people that you trust to look after areas that you know you aren't going to spend the time to fully learn and be able to do yourself. Because you trust them, in a lot of cases you implement their advise with mostly blind faith, and that's okay, but I'm here to suggest you ask for a little more out of them.
Before you implement any changes your advisor recommends, you should take this step. Have an active list of your professional advisors and send them an email. Tell them about the change you are looking to make and ask them Is this change going to have an impact on any of their existing plans that they already have in place or are planning to have in place for you. Most times, everything will be just fine or they may need to ask that advisor some additional questions. Sometimes, it could have a severe impact and that may need a change of course. Here's an example.
A business owner sets up a group benefit plan for themselves and their staff, on that plan is a disability insurance policy. That business owner has ensured that policy will cover him for most of his earnings in the event that he should be unable to show up to work. He is in his fifties and in the home run stage where he is looking to secure his earnings for retirement, so a disability could be potentially catastrophic. A few years down the road his accountant suggests that the owner switches from a salaried income to drawing dividends. While the accountant had their reasoning for suggesting the change it had a very large and potentially catastrophic impact. Because the business owner switched over to taking 100% dividend income he is now offside with his disability income policy as that policy will not cover dividend income. So for the last few years the business owner has been paying a hefty sum for a disability policy that had virtually no chance of covering his income and neither the accountant or benefits advisor was aware. Luckily,
we were able to catch this before a claim but this could have potentially cost him hundreds of thousands of dollars in lost income. Never mind the thousands he's already lost on a policy that wouldn't pay out.
Luckily, this issue has a very simple and free solution! Introduce your professionals to one another and let them know that it's important to you that they leave the lines of communication open. This way, before a major change is made the two parties have coordinated with one another and ensured it won't have a massive impact on your financial future.
If you would like a review to know if your policies are still going to do what you're wanting them to do. Click "contact us" for your free online review.
I think the number one question every employee benefits consultant gets asked before they meet with a potential client is the same, “what can you do about the price we’re paying”? We definitely understand, the bottom line is important and we need to ensure that we’re being cognizant of that. However, I find a much better question would be “Am I overpaying for benefits.”
When you buy a new vehicle you more or less know what the price of the vehicle is, you just don’t want to find out your friend is paying $10,000 less for that vehicle than you are.
Start with the 4 key areas of plan management and this will provide you with some better answers
So it’s important to ensure that you are comparing apples to apples but you also need to make sure you’re positioning yourself well within your industry. This is why a very important practice is to look at benchmarking. Benchmarking will let you know how your plan sits in comparison to other employers in a similar industry with approximately the same amount of employees. The plan you’re going to have in place for a Vac Truck business with 12 staff is going to look much different than a plan for a 80 person law firm. A lot of people understand the risk of offering a plan that is subpar compared to their competitors but it is often overlooked that you may be offering a plan that is way over what your competition is offering. Often your staff may not even care about the excess benefits, especially if it wasn’t designed with their needs in mind. So you may have a Cadillac plan and just be throwing money out the window as it doesn’t add to the overall satisfaction with the plan.
We’ll typically do a deeper dive into employee satisfaction, but I don’t mind sharing with you the number one cause of dissatisfaction, COMMUNICATION. I have sat down with companies and they have thrown their benefit booklet on the table and said you need to fix this our plan sucks. I open the booklet and flip through it only to find that they have platinum coverage, literally everything is covered at 100%. So what was missing? Communicating that value to the staff. The employees would hit their 3 month mark, they would have to go and ask if they got benefits, someone would tell them that they should be seeing something soon. Then, their booklet comes in, they don’t understand anything inside of it because it’s all insurance company jargon and next thing you know, poof, the plan sucks. Sound familiar? A clear policy of how the benefits are communicated to the staff is free and it goes miles when adding to the overall plan satisfaction.
The plan administrator is the person tasked in your office with looking after the group benefit plan and ensuring staff understand everything. Often times, I sit down with a plan administrator that might be the second in line to get the lucky job and they just look at me like a deer in the headlights. The truth is, this job can be very simple if the person knows where to access information easily and who to contact when they can’t find it. Sadly, this is often not the case. That being said, when that plan administrator makes errors, it can cost unnecessary money. So again, ensuring that your plan administrator knows this information can save you a ton in potential liability. We’ve made it easy for them as well, you plan administrator can join our monthly training webinars for FREE.
These are the benefits for the executives that are typically charged with overseeing the direction of the company and ensuring the ship stays on course and everyone gets to stay employed. Again, it’s an area where we often see they aren’t covered correctly. For example, executives are often relying on the disability income coverage through their group benefit plan. Often, they are the one who actually take the time to complete the medical insurability form that gets them the full amount of coverage they’re qualified for, because they want to be proactive. That being said, the first question I ask executives is, “do you plan to answer a work call or email while you are away from work with a disability”. If they answer yes to this question, there is a really good chance that will put them offside with their group benefits definition of disability. It’s important to make sure the people in those key roles are covered correctly so that they can get back to work as quickly as possible with minimal collateral damage to the company.
When we have our first meeting we dive more in depth than this but these are some of the key areas where we find employers may be overpaying for benefits. If you would like to go a little deeper to find out if you are potentially overpaying for benefits, click here book a time to chat with us.