Things to consider when choosing a benefit plan for your business
The vast majority of employers today provide benefit plans for their employees. Some of these plans have existed for many years and may be outdated in the coverage or other features they offer. Others are relatively new or have been refreshed because of cost or other factors resulting from the economic downturn. In any case, the success of a benefit plan depends on whether it meets the goals for which it was created.
When selecting a benefit plan or renewing your existing one, consider the following:
Employers' considerations
- Financial limitations: Benefit plans cost money. With health-care inflation far exceeding general inflation, the cost of benefits as a percentage of payroll grows every year. A benefits provider that can help you limit the escalation of claim costs is critical to your plan's long-term viability. Tools that help include the offering of low-cost alternative drugs, limits on reasonable and customary fees, limits on frequency of services and provisions for alternative treatments.
- Wellness: For sustainability, a benefit plan requires features and controls that provide the most value for your money. Wellness is an excellent component of ensuring your program's sustainability. Formalized programs encourage employees to take the steps necessary for improving their wellness and rely less on drugs and treatments.
- Future stability: Even well-thought-out plans that incorporate the two considerations above may face substantial cost increases in future. If your provider set an initial price below its own requirements in order to win your business, you will face hurdles in the years to come. Another provider may be less expensive over a period of several years than the one that has quoted the lowest rates to win your business.
- Administrative requirements: Central administration is necessary to a benefits program. Employers typically assume this role. Communication between employer and provider about employee eligibility can occur in various ways, from the mailing of paper forms to self-service via the Internet. Find a provider that does business the way that suits you.
Employees' considerations
- Value of the plan: Studies have shown that employees place high value on their benefit plans. Ninety-two per cent of employees responding to the 2009 sanofi-aventis Healthcare Survey would choose their plan over an extra week's vacation, while 59 per cent would choose health benefits over a more generous pension plan.
- Coverage: Employees who feel their benefit plan meets their needs are likelier to think positively of their employers. Positive attitudes create more productive and efficient work environments. Additionally, with the everyday use of social media, employers looking to recruit human capital want their existing workers to encourage others to join their organizations.
- Service: If the insurance company purporting to provide coverage doesn't do its job well, employees can become greatly dissatisfied. Responsiveness in paying claims and resolving issues raised over the phone is critical to employees' satisfaction. Poor service providers can cause employees to think negatively of their employers.
- Cost: When faced with coverage reductions, employees tolerate additional cost-sharing. Forty-three per cent of employees responding to the 2009 sanofi-aventis Healthcare Survey expressed willingness to pay higher premiums to maintain the same levels of coverage, while 23 per cent expressed willingness to pay more at time of claim.
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