Coordinating a solid healthcare plan is key for businesses both big and small. Benefit packages can be a strategic tool for building a company’s culture and helping employees feel valued and appreciated. According to a health care survey by Sanofi taken in 2015, 77 percent of employees would not move to a job that did not include benefits.
Erik Schmidt—a partner at Vancouver-based financial firm Schmidt + Funk—says that companies need to consider financial implications when setting up health care, as well as the needs of their employees depending on whether they’re Millennials, middle-aged or 60-plus.
Building a competitive plan
When looking at health insurance carriers, employers should know what their competitors are offering and make sure they are offering a similar or better plan.
“Within plans, there are numerous ways of structuring and setting up limits on items such as prescription drug coverage, chiropractor, physiotherapy, and dental,” says Schmidt. “The ways to recruit top talent is to make sure the plan you have isn’t too restrictive.”
It's critical to have communication between employers and employees on the value of their benefits and what exactly they have access—today’s standard health care plans often include Health Spending Accounts giving the employee flexibility over covering items not normally include-instilling a sense of fairness and loyalty.
Informing employees—especially Millennials—about health care apps and wellness programs can also increase awareness of benefits. “Claims should now be done either immediately at the till, or you should be able to take a picture of your receipt, submit it through the app and see the funds be dropped into your account within 48 hours,” says Schmidt.
Most carriers now provide a phone app to help employees track their claims and what their remaining limits are on benefits like massage therapy and dental.
Avoiding skyrocketing rates
The large mainstream insurance carriers can mimic each other’s offerings and at similar prices. Businesses should make sure they know what to expect price-wise down the road. Most direct carriers initially give businesses basic rates, but those rates will adjust based on their employee’s individual claims.
After you’ve had your plan for a year, the carriers will provide you with a renewal report detailing the premiums paid in to the plan and employee claims paid out. The carriers are going to want to make a margin between the two and sometimes as much as 35 percent. For all the routine items like prescription drug refills, and dental check-ups, it’s important to understand that there is no free lunch. “All you’re essentially doing,“ says Schmidt, “is paying the carriers to pay out your employees’ claims and at renewal, the carriers are going to adjust your rates to recapture any shortfall in the following year.”
When choosing plans, companies need to consider financial stability. According to Schmidt, the answer to this problem in many cases is accomplished by using the Chambers of Commerce Benefits Plan. Using the Chamber Plan your small companies is grouped together with 30,000 other businesses. When the plan renews, all the participating firms are renewed at once, eliminating the need to worry about how much individual claims causing your rates to skyrocket.
“The gap between large and small businesses is shrinking now,” says Schmidt. “You don’t have to be the size of Telus to offer a competitive benefits plan, those days are over.”
Critical illnesses and long-term disability
According to a 2016 Sanofi survey, 45 percent of plan members say they’ve been diagnosed with a chronic disease such as diabetes, arthritis or depression.
“In terms of value most employees tend to focus on luxury benefits such as dental, but the most important benefit in my mind is long-term disability—repairing a tooth is not as important as protecting your greatest asset—your ability to earn an income,” says Schmidt.
Schmidt also says that critical illness insurance, which pays out a lump sum amount if an employee is diagnosed with cancer, has a heart attack or another serious illness—is also worth considering.
A well thought out benefits plan pays close attention to what’s commonly offered within your industry while considering cost containment strategies that don’t put limitations on its ability to protect your employees and their families.