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.