The sad reality is there is no manual available for business owners when it comes to why or even when they should be shopping their employee benefits. It mirrors quite honestly what you probably felt emotionally on Day 1 opening your business.
What now?
My guess is, like me, we tend to only think about insurance when it becomes more of an expense. When does that happen? Generally about 60 days before the end of the policy year! Normally at your renewal is when rates change, your coverage options broaden, or even you are receiving a phone call from your insurance agent to remind you your renewal is happening (and if they aren’t then Step 1 for you is skipping Reason’s 1-8 and go directly to Step 9).
Let’s start at the beginning.
Why offer an employee benefits package?
You have a recruiting tool for quality employees, prospective employees will shop employers on benefits.
This allows you to remain competitive in the job market. In some cases prospective employees would be willing to take less pay, if they have better benefits or if the employer pays the for the coverage. Keep in mind this isn’t limited to medical coverage, this could also include, vision dental, life and disability insurance.
You can retain employees longer.
Employee turnover is inevitable, and part of doing business. However, by offering a benefit package it can slow the turnover process. More of a rotisserie than a convection oven if you will. Employees will stay with an employer longer if they have benefits, science has proved this many times.
You create lower tax liability by paying a portion or all of the costs for the employees.
When you pay for a portion or all of the insurance premium the amount you pay becomes deductible to the business. I know as a business owner myself one of my goals is to lower my tax liability. Here’s the legal stuff from the IRS.
Generally speaking, you are providing your employees with access to better Physician Networks than in the Individual Market.
Most of the individual plans that are available now are all limited network HMO (Health Maintenance Organization) style plans. This means individual are only able to receive care at facilities that are considered In-Network. This means a preferred doctor or hospital may not be contracted requiring the individual to change providers. While these types of plans are available in the group market, PPO (Preferred Provider Organization) networks are also available. These are the plans that allow insureds to see any provider in the network, or not.
The tell all guide to why you should be shopping your employee benefits
Group Health Plans Change
Benefits change every year. So while your premiums may remain the same or have a slight increase, the deductible and or out of pocket maximums will increase. Potentially paying more for less.
Prescription drug benefits can change too. You might have a additional deductible added for non-generic drugs, or your drug may not even be covered any longer. Insurance carriers tend to change their drug formularies often. Usually as consumers we find this out the hard way, like when you go to the pharmacy and they tell you your drugs are $8000 instead of your $30 copay it was last month.
Rate Increase
That slight increase I mentioned above, sometimes may not be so slight. It’s not uncommon to see 20% to 30% increases. Typically by shopping other carriers and plans, you can find a plan that cost similar to what you are paying now. Keep in mind you may be decreasing benefits to keep that cost.
It lets you know your Broker really does work!
This is your brokers time to shine! Remember they work for you. They will know trends with different carriers, plans, and physician networks. Let them know what you are looking for, similar deductible, similar premium, maybe it s a specific doctor or drug you need covered. They can find plans for you based off the criteria. If you give them nothing, it might turn in to shopping for shoes.. The whole I need a size nine but the sales person comes back with 10 in a different style.
Education
The simple fact that you know where your plan stands in the market. Cost determines benefits, or vice versa. Are you getting the “value” out of your health insurance premiums? This also comes back to your broker working for you.
Your Employees change
Part of being in business is employee turn over! Some industries, like hospitality ( hotel, restaurant) have a very high turnover rate. . If you do not shop based on your current employees, your rates will be based off your last years employee enrollment. This could greatly impact your rates.
Plan options
Maybe you want to switch plans types, PPO to HSA. HMO to PPO, although this wouldn’t lower your cost. HSA to Self-Funded… POS to HRA, and no POS doesn’t mean what you think it does!
Wellness Incentives
Most carriers have wellness programs or incentives for employees. These programs incentivize employees to improve their health, which means healthier employees for you. Healthy employees means less time away from work, more productive employees (more money) and generally happier employees which also improves moral at the office.
Two examples…
Humana has a program called Go365, this program encourages employees to get out and move. Employees accrue points for logging different activities like, exercising, keeping a sleep or food log, it even includes a coupon for free health assessment. As employees earn points, they also earn credits to purchase items like gift cards, gym bags, Amazon Prime Membership, Fitbits, and even Trek Bikes! Here’s the best part, the employer can earn up to a 15% discount per employee, per month. This can save employers hundreds of dollars a month! Oh, and its a free program automatically included with your health plan.
Aetna uses a company called Peerfit. Peerfit can also be used on it own without an insurance plan. If used on it’s on, there is a monthly membership and this membership gives you discounted drop in rates at Crossfit Gyms, Pure Barre, and Title Boxing. If used in conjunction with an Aetna health plan, there in no membership fee, and they give each member (employee) of the plan credits to attend classes. Once the credits are used up, the health plan member can purchase more at a discounted rate.
Bundling Discounts
The American way is the more the better right!? It works with insurance too, mostly. When you combine your group benefits like medical, vision, and dental with one carrier, they give you a discount! This discount is not on health insurance rates, The Affordable Care Act won’t allow discounts on health premiums. Yes, that’s a link to the full Bill… ( if you need help sleeping at night, go a head and bookmark that link) The discount applies to the ancillary lines of coverage policies like, dental, vision, accident.
Your Broker
Lets go back to referenced about “It lets you know your Broker really does work” What if they don’t? You can shop Brokers too. This is a service based relationship business. Are you getting the service you need? How often do you talk to them? Once a year at your renewal, probably. How many times have you had to call an 800 number and explain the situation to three or four different people before you get to the correct one, frustrating right? What if I told you, you can call your Broker and only explain it once… I know, crazy talk! Do they contact you to tell you about new regulations or requirements? Like to new Mini-C.O.B.R.A. law in Arizona..?
Insurance is a necessary evil, we need it to protect your health, our homes, our business. Employers can also use insurance as a tool. A tool to lower tax liability, a tool to hire quality employees and a tool to keep moral in the office. Using a good broker who can help design a package to fit your needs can also be a valuable tool, not only to employers but to employees as well. If you haven’t heard from your broker, or simply want to have an unbiased opinion about your current benefit package, take a second and fill out the form below. If you’d like, you can upload your plan documents as well.
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