Sponsoring an employee health benefits plan is an important part of the total compensation package you provide your employees. Unfortunately, far too many employees don’t have a good understanding about their benefits plan and what is covered.
It’s important information
Many employees are under the misconception that every benefit plan is the same. This could not be further from the truth! If you have the right employee benefits provider, your plan is customized for your company and your employees. There is a lot of variation in individual benefits that are covered, how they’re grouped (which affects shared maximums) and what level of coverage is available. The problem is, almost 80% of employees (according to the International Foundation of Employee Benefit Plans) do NOT open or read their benefits materials.
This lack of knowledge undermines the whole purpose of sponsoring an employee benefits plan. One of the main reasons to sponsor a plan is to improve the health and wellbeing of employees. If employees don’t know which benefits are available, then they aren’t able to leverage those benefits to improve their health.
In addition to what is covered and how much coverage is available, there are other areas of employee benefits that are often misunderstood.
- Coordination of Benefits – When your employee and their dependents are eligible for coverage under more than one employee benefits plan, there can be confusion around making claims. Which plan should the claim be submitted to first? What is the advantage to being covered under more than one plan?
There are established procedures within Canada for coordinating benefits coverage between several plans. The advantage of being covered under more than one plan is that the plans work together to pay claims, usually providing a higher level of overall coverage for the plan member. There are several scenarios that often arise, but the most common is that the plan member and spouse each have coverage under an employee benefits plan at their own workplace. In this scenario, the employee would first make a claim to their own employee benefits plan. Then if there was any remaining balance that was not covered, they would claim it under their spouse’s benefits plan. When it comes to claims for dependent children, the birth month and day of their parents is used to determine which plan the claim is submitted to first. The child’s claim is first submitted to the plan of whichever parent has an earlier birth month and day.
- Cost Sharing – The costs of premiums for a benefit plan are often shared between employer and plan members. There are usually several factors in cost sharing. Keeping the plan sustainable, and having employees more invested in controlling costs (since they are helping pay the premiums), are two common reasons. There are also tax implications that employees should know. Disability benefits are a good example: if any amount of disability premiums are paid for by the employer, then in the event of a disability claim, the benefits paid to the employee are taxable income for the employee. Having to pay tax when your income is already reduced (because of disability) is not a good scenario for employees. This tax implication is one reason that many employers choose to have their employees pay for the entire cost of premiums for disability coverage. In this instance, it’s important for employees to understand why it can be beneficial to them to pay their own disability premiums.
- Health Spending Accounts – Health spending accounts are a much-appreciated element of many employee benefit plans, but they too are often misunderstood and underutilized. While employees may know they can use the account to pay for eligible health expenses, many employees don’t realize that they can also use their health spending account to pay for unpaid portions of other benefit claims. For example, if the benefit plan covers 80% of paramedical services and the employee goes for a massage, they will be out of pocket 20% of the cost of the massage. They can then submit a claim to their health spending account for the 20% that wasn’t initially covered. In this way they can use their health spending account to receive a higher level of coverage instead of just making new claims on it.
Teach them about their plan
Educating your employees on their health benefits plan should be an ongoing initiative. New employees receive a package of information on the plan, but if most people don’t actually read the package then they are not getting the info they need.
Ideas for ongoing education about the employee benefits plan include:
- Company intranet/internal webpage – Highlight different areas of your employee benefits plan by posting articles, quizzes and fact sheets.
- Host ‘Lunch and Learn’ sessions – Encourage employees to attend a presentation on employee benefits by offering free lunch.
- Messages and emails – Send plan features and updates by email to employees to educate them about their benefits.
- Benestats – Provide employees with a yearly total compensation statement. Sharing the value of the benefits you are providing may inspire employees to learn more about the benefits that are available to them.
Educating your employees on their health benefits plan can pay off for your organization and for your employees. A good understanding of your employee benefits plan helps employees appreciate the value of the plan. You’re making an important investment in your employees and their health – they need to know! This can improve retention and help with recruitment efforts. It’s also likely to help with employee engagement.
Your employees will benefit from better health. If they know which benefits are available, they’re more likely to utilize them to support their health. This is a good thing for employees, and it’s also a good thing for your organization. Healthy employees are often more productive.
Good Advice is Key
Do your employees have a good understanding of the employee health benefits you provide? Do you have tools and support to get the message out there? If not, it’s time to review your options with one of our licensed advisors on the phone or contact us for a comparison quote.
Whether you’re looking for extended health and dental coverage, disability coverage, or life and critical illness coverage, GroupHEALTH has affordable benefits packages that work as hard as you do.