Offering an employee benefits plan is an effective way to attract and retain valuable employees in your organization. Well-treated employees are known to work more efficiently, and stay with an organization in the long-run. Unfortunately, too many employers are guilty of the following five common mistakes, potentially negating the positive benefits of having a benefits plan at all. Here, we review the top five common mistakes employers make when purchasing employee benefits, with CloudAdvisors CEO Matt Lister.
As obvious as it sounds, many employers do not view the budget for employee benefits as a long-term investment. The cost of benefits is directly related to the cost of healthcare, meaning if the cost of prescription drugs increases, it will increase the cost of insurance. Similar to other business expenses, these increases must be anticipated in the budget.
There are many variables in securing competitive coverage. Without a long-term budget, employers can find themselves in a short-term cost saving plan and miss the opportunity to focus on holding value for their employees.
2. Advisor Evaluation
Advisors (or Brokers) do not work directly for insurance companies; they are independently hired by the employer. Advisors earn a recurring commission on benefits sold or re-signed to the employer annually. They are traditionally contracted to offer provider plans and quotes for purchasing, however employers should value their Advisor on their ability to provide ongoing Advisory services such as access to information and advice.
Evaluation questions to ask before hiring a Broker or Advisor:
- Do they offer additional services to enhance your decision making?
- Do they include recommendations and considerations to stay within budget with the most value?
- Do they provide current marketplace data for comparison?
- Do they provide ongoing support your organization and employees for issues or claims?
After the budget is in place and you’ve hired an Advisor, the intent is to evaluate competitive policies within your budget. Provider Benefit Plans may look similar in costs but offer different value to employees.
Conventionally Advisors present employers with a spreadsheet of pricing to show the differences in premiums from various insurance carriers and benefit providers. By focusing on the final cost without comparing the benefit package in full, employers can be misled into what they are purchasing.
Your Advisor should provide a comparison report and plan audit to reveal any pricing or coverage gaps in your industry. CloudAdvisors has released a 10-step Marketing Checklist to assist Advisors and employers in finding the best policy and lowest premium for your company plan.
4. Added Values
Insurance providers take pride in offering value added services to clients, and these values are often left unknown during customer decision making. Advisors are encouraged to know and endorse the provider’s additional services such as fraud detection, disability management, and overall plan member experience.
An expert Advisor with access to the marketplace can research the best combination of value either from one large insurer or from a combination of insurers, third party administrators, and specialty providers. In summary, this help employers get more for their money.
Commonly when life events occur employees are unaware of the benefits and coverage that is already in place. Many employee benefits are paid for but considerably under utilized because employees are unaware, especially education and proactive health and wellness programs (EAP, Navigation, Second Opinion, Virtual Health).
Creating a clear communication strategy for the employees and their families can help highlight the key benefits that employees have access to. It is just as important to acknowledge these changes as it is to make them, this will help prevent any assumptions or confusions moving forward.
Researching and purchasing Employee Benefits can be complex and employers rely on Advisors for advice. Advisors powered by CloudAdvisors use Canada-wide data to help employers form their budget and compare industry benefits
The CloudAdvisor platform is free to join for employers and employees and provides access to custom comparison reports and our Solution Marketplace. Search over 500+ provider plans with simple keywords.
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