An Overview Of Benefit Plans for Small Business
For small businesses, offering employee benefits that meet employee needs while staying within your budget can sound daunting. If you’re looking to buy benefits for the first time and don’t know where to start, we break it down for you in this simple guide. We also include sample plans, sample pricing, and our top provider suggestions for small business – all of which you can access for free in the Solution Marketplace.
- How to set up benefits for small business
- How much do benefits cost?
- A sample benefits plan for small businesses
- Basic health benefits
- Benefits to stand out
Today in Canada, employee benefit plans are leaning towards customization. More than ever, employers are looking to provide diverse health insurance to maintain support across a variety of employee needs. The days of standardized prescription, dental, and vision coverage are gone as they tend to waste employer budgets, and fail to meet employee needs. As a small business owner, getting the most out of your money is important. For this reason, customizable plans are recommended for businesses of all sizes, regardless of your budget.
With this in mind, we’d like to emphasize there is no one-size-fits-all cheat for first time benefit buyers. As much as we’d like to tell you it’s a quick process, buying benefits should take some thought, research, and proper budgeting per employee. Fortunately, CloudAdvisors simplifies and streamlines the process so you can get back to running your business. Following these steps ensures you get the most benefit (literally) for your budget, support the needs of your team, and boost your recruitment strategy.
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How To Set Up Benefits for Small Business
In simplest terms, to buy employee benefits in Canada you need to choose an employee benefits advisor. We know using a third party can sound expensive or complicated, but an advisor is your advocate; they’re there to handle the legal jargon and make sure you get the best deal. Advisors don’t typically charge their clients any fees, but make a sales commission instead paid by the provider or vendor. This leaves you free to choose the best advisor for you, with no fear of budget restrictions.
1. Understand Employee Needs
Every business is different, which means the needs of employees will vary per organization. Before you implement a benefits plan, discuss potential options with your employees. Employers who make assumptions about staff health care needs will find their benefits plan does little to improve attraction and retention. After all, if you’re going to offer dependent life insurance to a workforce of unmarried, childless young adults, you may find you’ve put your money in the wrong pockets.
Start with an initial benefit survey that covers the basics, and additional perks employees may value. While it may be tempting to google the “top 5 employee benefits” this may not get your plan where it needs to be, and may prove to be a waste of time. After all, “top 5” is fairly subjective when it comes to the varieties of paramedical practitioners, deductibles, coverage levels, and monthly maximums. To get started, you can use a free service like Google forms, Survey Monkey, or polling apps within Slack.
Take our word for it and start with a survey. Your employees (and your budget) will thank you.
2. Benchmark Your Plan
If your goal is to improve attraction, retention, and company culture, benchmarking is a critical step for success. Benchmarking is the process of comparing your benefits plan to competitors, or companies with similar demographic data. Through benchmarking, you can make more informed decisions on what to offer employees by comparing coverage levels, deductibles, and types of benefits.
Without a benchmark, it can be difficult to know where to start in the process of building a benefits plan. In contrast, comparative data can help you decide how you want to stack up against your competing recruiters. When reported correctly, benchmarking data should use a sample size of more than 100 similar companies to ensure data integrity.
With CloudAdvisors, plans are benchmarked on a national scale, by province, by industry, and by number of employees. We go further than benchmarking, and provide our own plan insights to help you make decisions easily.
3. Qualify Your Benefits Advisor
Due to licensing laws in Canada, advisors are a crucial part of the benefits selection process. Benefits advisors (or group advisors) are your advocate in selecting benefits. Their job is to filter through the hundreds of benefit plans available and present the best options to you, their client. In Canada alone, there are more than 150 benefit providers (vendors) with unique products, at different price points. Today, the only place to view all these solutions is in the benefits marketplace, which employers can access for free.
Unfortunately, not all advisors are made equal, and selecting the best one for your firm may be a challenge. Different advisors will have loyalties with different benefit providers. Loyalties are generally determined by exclusive deals, higher commission rates, or long-time networking partnerships. For this reason, we suggest using an agnostic platform like CloudAdvisors, who will match you to an advisor based on your company size, location, and the industry you’re in.
4. Join the Benefits Marketplace
As mentioned above, there are more than 150 Canadian benefit providers, with the list growing every day. With improved discussions on health care diversity comes new products you’ve likely never heard of. We’re willing to bet you haven’t considered teen-specific mental health therapy, gender affirmation support, or bitcoin RRSPs – but they exist, and they’re gaining traction for a reason. Largely, HR managers and small business owners are leveraging the opportunity to up their recruitment strategy – by taking their benefits plan into their own hands.
But isn’t that the job the benefits advisor? To curate benefit solutions for HR to assess? Unfortunately, even with the best advisor in the world, it’s unlikely you’ll ever see all (or the best) options available to you and your organization. In the same way you use Google to find answers fast (throwback to the days of owning full encyclopedia sets), the CloudAdvisors Solution Marketplace is the best (albeit only) open benefits search engine out there. In a word, if your advisor isn’t on CloudAdvisors, they’re using figurative encyclopedias (aka: manually emailing providers for updated pdfs and marketing materials – which they’ll fax to you in 5-7 business days). In short, joining the benefits marketplace is free, easy, and provides the best open access to all your options.
5. Update Your Plan Annually
Our final step is to keep your plan up-to-date on an annual (at a minimum) basis. While employee needs are constantly evolving, your plan needs to evolve with those needs. In particular, if your firm recruits frequently, or sees frequent turnover, reassessing the priorities of your staff is a must.
Generally, your employee benefits advisor will book a meeting with each of their clients once per year. This meeting is called annual renewal. At annul renewal, your advisor will show you how much your premium has increased by. Usually, this is based off factors like how much coverage was used by your employees in the past year. Your advisor may also present new product suggestions. Too often, however, annual renewal is just that – a resigning of the same contract and same plan. In fact, a study from Benefits Canada showed more than 90% of organizations haven’t made a real change to their benefits plan in the last decade.
If your goal is to optimize your benefits to drive recruitment, offering ten-year-old benefits will have little impact on success. At annual renewal, take the time to reassess employee needs, benchmark your coverage against evolving industry standards, and explore the marketplace for new ideas that best suit staff requests. In the CloudAdvisors marketplace, we also make tailored suggestions for your organization to help you narrow down our 500+ listings.
How Much Does Health Insurance for Small Business Cost?
Every business is different, which means every benefit plan will cost a different amount. The cost (aka premium, aka quote) of your plan is typically impacted by factors such as number of employees, coverage levels, and benefits included. That said, some providers will offer a flat amount regardless of these factors, which depending on your company demographics, can be beneficial or consequential. For this reason, it’s important to get quotes from a number of providers so you can properly weigh the pros and cons within the scope of your budget.
Generally, your group advisor will take on the responsibility of collecting quotes, which they will present to you during annual renewal. With CloudAdvisors, you can access quotes yourself in real-time, a feature we call instant quotes. After all, if you’re going to explore a marketplace, you should expect to know what you’ll be paying. If you find a product you like, you can even add to cart and check out directly on the platform. Read more about how much employee benefits cost per employee here.
Under 50 Employees
Different employers have different goals for their benefits plan, which means premiums have no one size fits all price tag. Within the CloudAdvisors marketplace, we provide sample plans for small businesses to gauge the cost of their first benefits plan. You can view the estimated total per employee, which benefits to include at at what coverage levels, and other benefits not included in the quote if you want to go above and beyond.
The price quoted below is based on an organization with less than 50 employees, and costs an estimated $375 per employee per month. If the organization offered all the benefits listed below, they would sit in the 90th percentile of plans in Canada. In other words, this would be an excellent plan for a small business owner to offer their employees. If you’re curious about the exact coverage levels offered within this plan, you can generate your own sample plan by signing up for CloudAdvisors here (it’s free!).
Basic Health Benefits
So we’ve covered how to get started, where to find the best options for you, and how much benefits should cost. With all of that, what benefits should you actually include in your plan?
Benefit plans typically include offerings from both the list of basics and our list of trending or new benefits. While items like virtual health care are new, they’ve rapidly become pillars of a great plan due to changing employee needs, and greater access to technology. Choosing benefits that your employees want, and selecting coverage levels that benefit them most are all important factors to consider for boosting your attraction and retention.
The most well known benefits typically fall under basic health care offerings. This benefit category includes:
- Basic dental (check-ups)
- Major dental (surgeries)
- Vision Care (check-ups)
- Glasses & Contacts
- Paramedical Practitioners
- Massage Therapist (RMT)
- Athletic Therapist
- Clinical Counsellor
- Speech Therapist
- Health Management
- Typically includes easier access to a yearly physical examination, or navigation platforms to help group members navigate their plan options.
Accident & Loss
- Short Term Disability (STD)
- This insurance pays out to plan members as a form of income when they become unable to work. The most common reasons for an STD claim are due to mental health. STD claims can typically last a maximum of 26 weeks.
- Long Term Disability (LTD)
- Long term disability insurance pays out as a form of income to plan members who are unable to work due to disability or illness.
- Critical Illness
- Critical illness insurance pays a lump sum to plan members who are diagnosed with a covered condition. Examples include cancer, heart attack, and stroke.
- Accidental death or dismemberment provides financial assistance to plan members who are injured as a result of an accident. AD&D covers loss of life, loss of a limb, blindness, and more.
- Life Insurance (and dependant life)
- Life Insurance provides financial assistance in the event of a plan member’s death. Benefits are paid to the named beneficiary completely tax-free.
- Safety Planning
- Also frequently labelled as work safe solutions, these programs cover ergonomic equipment, safety training and certifications, and PPE.
While there are a number of financial planning options for individuals and groups, group plans typically cover retirement and education savings plans.
While prescription drug coverage is essential in any plan, options vary in coverage levels. Typically, plans will range from 80% to 100% coverage levels, with most capped at a fixed maximum, or a reasonable and customary amount per expense. In addition, coverage will contain an annual maximum, and some plans will require a deductible. More options for your prescription drug plan include:
- Preferred Pharmacy
- Preferred pharmacy options give plan members discounts when they buy prescriptions from select pharmacies. Some preferred pharmacy options include online prescription refills, and prescription delivery as well. These arrangements allow employees to stretch their allowable limit further, while keeping your premiums down.
- Drug Plan Management
- Also known as drug plan managed formularies, these programs are drug advocacy programs that help plan members find more affordable options for expensive prescriptions. Often, they will also help members find alternative methods to fund these expensive purchases.
- Pharmacogenetic Testing
- Because the effectiveness of most medications depends on genetic factors, pharmacogenetic testing (or PGX) helps plan members get medication therapy optimized to their DNA.
New Offerings to stand out
For any competitive plan worth it’s merit, mental health coverage is a must. Some of the most common offerings with the mental health space include:
- An employee assistance program (or employee and family assistance program) is a short term counselling solution
- Mental Health Programs
- Cognitive Behavioural Therapy
Supporting LGBTQ+ employees is a vital step in building an inclusive workplace culture. Members of the LGBTQ+ community face greater challenges in accessing health care they need, and as an employer, it’s socially responsible to ensure the needs of these employees are being taken care of. On average, health care programs are aimed at individuals who are cisgender, or heterosexual, with many practitioners unaware of how to best support people who do not fit these categories. Taking that next step as an employer can go a very long way in building a great culture.
- Gender affirmation programs
- Fertility benefits
- Family assistance programs
Virtual Health Care
What was once a pandemic trend has become the new best standard in health care. Virtual options for employees boost accessibility, in turn improving employee engagement.
- Virtual mental health
- Digital clinic options
- Youth mental health therapy
- Virtual paramedical access
- Healthcare Spending Accounts
- Lifestyle Spending Accounts
- Pet Insurance