Whether you're looking for a group benefits policy for your own company or have been tasked with the responsibility of researching benefit plans, it's important to know what you should be trying to achieve. 
​​Structured properly a group benefit plan can help you to achieve the following:
  • ​Reduce turnover within a company. It's important that your compensation structure be competitive to what other employers within your industry are offering.
  • Offer guaranteed insurance coverage to owners or employees who would not qualify otherwise.
  • Benefits are preferred over a salary raise in a lot of cases and often cost the company less.
Below are 4 options for Group Benefits. 
The pros are in green and the cons are in red.

Health Care Spending Account

Corporations that need to take advantage of tax deductions, companies that may not qualify for traditional coverage (ie. risky profession, seasonal staff, transitional employees), can be added to any of the other plans to add a level of fixed cost protection and flexibility.
​​The employer funds a spending account that the staff can access using a card or an app.

​Each employees account has a limit and once that limit is hit they won't be able to make any more claims until the following year.
  • Flexibility.
  • Certainty of Bottom Line.​
  • No insurance coverage for potentially catastrophic costs that can occur.
  • No ability to split cost with staff.
  • Employees with families may worry that the limits won't be adequate.

Administrative Services Only (ASO)

Larger employee size, ideally over 100, good cash flow where fluctuations in claims won't be an issue.
The company structures the program exactly like a traditional group benefit plan; however, instead of the insurance company taking the risk of the claims the employer is directly taking the risk.
​This allows the employer to get back any portions of the premium paid that the employees didn't use. 
  • Can be more cost effective than experience rated or pooled plans.
  • Employer gets back what isn't used by the staff at the end of the year. 
  • Claims can be extremely volatile and funding can vary greatly month to month and year to year.
  • Changing from this model to another may require the employer pay off a large lump sum to cover any deficits .

Experience Rated or Partially Pooled Benefits

Employee size of 15 or greater, employees not expected to make excessive claims.
An insurance company will base your rates either directly or partially on what your company claims. Over the years you build "credibility" which can then be used by other insurance companies to determine what they will bill you should you ever decide to switch companies. 
  • Risk is held by the insurance companies.
  • Options can be customized quite easily.
  • Better claims experience can help you leverage better premiums from other providers.
  • High claims can cause very high and sometimes unexpected increases come renewal time the following year.
  • Employers can be asked to fund reserves so that the insurance companies risk is lowered in subsequent years.

Fully Pooled Benefits 

Employee size of 15 or less, employees expected to claim higher than average.
Your rates are calculated based on a large pool of companies that are also using the benefit plan.

​Rates are calculated each year based on the amount of claims throughout the entire pool along with changes in dental fee guides and increases in health care related expenses. 
  • Premiums are relatively stable year to year.
  • Companies with high claims have the protection of the pool. 
  • Plan options can be more limited than in ASO or experience rated benefits.
  • There may be limits put on certain lines of benefits to help control pool costs .
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