How to Get the Most Out of Your Employee Benefit Dollars
Starting your own business takes a lot of hard work. It also takes money – which is usually not so easy to come by! As such, most small business owners have learned the art of stretching every dime as far as it will go. So, when it comes to the money you spend on employee benefit, you want to get the most out of the dollars you’re spending.
There are a lot of options, but which are the right ones? Let’s examine some choices you can make with your employee benefits, to see whether it will help you maximize your return on investment.
Include cost containment features – YES
The age-old adage “an ounce of prevention is worth a pound of cure” is certainly true when it comes to employee benefits. Preventing your benefits costs from climbing out of control is a much better strategy than damage control once they’ve already climbed too high.
Prescription drugs are coverage that really “benefits” from cost containment tools. They’re typically one of the biggest contributors to total benefits costs, and it’s straightforward to implement cost containment strategies. Drug formularies and the use of central dispensing pharmacies help control costs so you and your employees get the most out of the money you spend on benefits. GroupHEALTH has a whole range of unique products aimed at controlling prescription drug costs, called Smart Rx Solutions.
Another area where cost containment tools are both necessary and effective is disability benefits. A key strategy is to use professional “disability management services”: these provide early intervention and support for your ill or injured employee. Disability management teams focus on getting employees safely back to work as soon as they’re able. Not only is this best for your employee, but it also helps contain the cost of each disability claim.
Choose an off-the-shelf benefits plan – NO
You may think that choosing a cookie-cutter employee benefits plan will help stretch your benefits dollars the furthest. The problem is, you will sacrifice more than just quality. Your business and your employees are unique; to get the most out of your benefits dollars you need a plan that is flexible enough to meet the needs of your employees, not someone’s idea of your employees.
Choosing a plan that doesn’t fit your business – your employees, you, and your budget – will not help you get the most out of your benefits dollars. Instead, it may very well provide some benefits that don’t meet the needs of your employees. Without being able to configure your plan, it’s likely that it won’t align with your long-term vision either.
Consider a hybrid plan – YES
Look at plans that combine traditional elements of employee benefits (eg. life insurance, disability and prescription drugs) with more progressive elements (eg. a health spending account). By combining the two, you can provide coverage for catastrophic medical expenses while giving employees flexibility in how the rest of their benefits dollars are spent. GroupHEALTH’s Evolve product is a great example.
A health spending account allows employees to choose how their money is spent, so they can select the benefits that mean the most to them. In this scenario, you and your employees are getting the most out of your benefit dollars, and unspent health spending account money is returned to you, the employer.
Choose a standalone Health Spending Account – NO
When the budget is tight and you’re feeling uncertain about the future, you may think that offering a standalone health spending account makes the most sense. This way employees can spend their benefit dollars on whatever eligible expenses they like, and you know exactly how much you’re spending on benefits. As it turns out, this is not the way to get the most out of your benefits dollars.
A standalone health spending account can be used on any eligible expense, but it doesn’t go very far when it has to be shared amongst all employees health and dental expenses. Most benefits providers (including GroupHEALTH) can use group buying power to offer a robust suite of benefits at a reasonable cost. Then to supplement the base plan, you add a health spending account. Using a combination of a health spending account and traditional benefits is a much better way to get the most out of your benefits dollars.
Seek out customized employee benefits – YES
To get the most out of your investment in employee benefits, you need benefits that provide the most value to your employees. If you look for a plan that can be customized to meet the unique needs of your business, you and your employees will both be more satisfied. Choose a benefits provider that can assemble the best benefits (regardless of whether they’re offered by different insurers), so you’re spending money on benefits that your employees really value.
Choose the cheapest option – NO
Choosing a benefits plan based solely on price in order to get the most out of your benefits dollars is not a good strategy! The cheapest option may be missing important elements or add-ons. If the price sounds too good to be true, it probably is.
Some benefits providers dangle the proverbial carrot of an inexpensive plan, then hit you with a substantial increase at renewal time. If this is the case, you’ll be switching benefits providers again. In the end, this costs you time and money and wastes valuable benefits dollars. To get the most out of your benefits dollars, be sure to focus on the long term. Find out what cost containment tools are in place and get specifics on what benefits and extras are included. Look for a fair price that delivers the most value, not necessarily the cheapest option.
Good Advice is Key
The best way to get the most out of your employee benefit dollars is to work with a knowledgeable provider that can help you choose a plan that provides you with the most value. Review your options with one of our licensed advisors on the phone, or contact us for a comparison quote.