Value Over Cost – How to Positively Approach Benefit Renewals
When it comes to employee group benefits, the whole administrative process can be daunting – what makes it worse? When you go to renew, and the cost has spiked. What’s that all about?
Group benefit costs in Canada are forecasted to rise 7 per cent in 2022. A combination of higher costs for prescription drugs, dental care and paramedical expenses was identified as the major driver of the cost increase. But at the end of the day, employee claims, plus those pesky administration fees, along with insurance company profits all factor into that higher price tag.
While the price might feel like a pain for a lot of small businesses (and it most definitely is), I like to tell people to approach employee health benefits as an investment, not a cost.
This is the main point that I encourage employers to consider: If you make your benefit decisions about price alone, you may miss the bigger picture on what they can do for your business.
23 per cent of businesses do not regularly evaluate their group benefit plan, aside from doing what’s absolutely necessary for renewals, and this number only increases to 31 percent among small business owners, and 32 per cent among those who do not have specific objectives for their plan.
Small business employers have unique needs and challenges that differ from medium to large size corporations. Ideally, the conversation moves beyond costs and onto establishing short- and long-term objectives that tie into business success. It’s not all about price – these goals need to look at all the factors that play into the decision, including breadth of options, plan flexibility, administration fees, processing time, claim payment process, and ease of use for employees.
There are a variety of differences in preference when it comes to group benefits, especially when it comes to life-stage priorities. Because of this, it’s important for you to take your employee demographics into account when considering pros and cons of your group benefits plan. For instance, does your company have a broad mix of age groups? If so, consider a plan that offers a healthy mix of basic coverage, but also covers childcare, retirement planning, or low interest loans. Alternatively, if you happen to employ mostly millennials, you might consider switching to a plan that offers more paramedical and lifestyle-related benefits – or given today’s climate, an employer assisted homebuying program.
Not only this, but the knowledge and ease of use of said plans plays a huge role in their effectiveness. Ensure you’re providing opportunities for employees to understand their coverage, and that the plan provider has an easy-to-maneuver interface. What good is a cheap plan if no one knows how to use it?
To provide your workforce with the benefits they’ll love and use, you need to understand what your employees’ needs are. When you begin to look at your renewal period as an opportunity to improve your employees’ quality of life, the price tag might take a back seat to those other factors.
It’s still wise to make business decisions based on reviewing your options every few years – when that time comes, I recommend the Chambers Plan. As a not-for-profit, the Chambers Plan premiums cover the plan’s claims and administration costs, and any profit is reinvested into the program to add features and to keep costs stable. Plus, the plans are fully customizable.
The facts are simple: better benefits make happy employees, and happy employees do better work. The important thing to remember? Better benefits do not always correlate with a higher price tag – if you identify your needs, you’ll be better able to fulfil them. Can you think of a better company investment? ‘Cause I’m drawing a blank…