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
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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.
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Dean Chapman is a financial planner with an affinity for business.