Components of Employee Health Benefits
There are two basic components of employee benefits plan: Insurance and Service
Insurance refers to who holds the risk associated with a plan or defines who pays for the claim.
Service is sometimes called “administration”, this refers to delivery, management, and customer service associated with the plan. Service defines who processes the claim.
Employee benefits providers usually handle just the administration of the plan. They don’t usually insure the plan themselves. Instead, they work with the insurer, so that the insurer takes on the plan’s risk, and the employee benefits provider does everything else. This can create a much better employee benefits experience.
Employee Benefits Landscape in Canada
Over the past few decades, the employee benefits industry has seen a consolidation of insurers. Just three insurers in Canada dominate the marketplace. The next closest competitor has just a quarter of the market share of any of the top three insurers. This means that when employers are looking for benefits, they can be inadvertently pulled into the market shared by a few insurance players, leaving them with (seemingly) little choice in the marketplace.
As a result of this dynamic the number of specialized employee benefits providers has increased, too. Employers do have options – good options, in fact!
As noted, a few insurers currently have a very large part of the market because they’ve traditionally been the “go to” for employee health benefits. They’ve been in the benefits business (along with their other product lines) for a long time. They have great reach, because of their huge size, but they are heavily regulated. Therefore, large insurers can find it hard to change and adjust to new trends. They’re often satisfied with what they’re doing, taking a risk rather than an opportunity approach to new products and services. Even if their products and services aren’t working well for their customers. And perhaps most importantly, their focus isn’t always on the benefits experience – it’s on the risk aspects of insurance.
Specialized Employee Benefits Providers
Good Advice is Key
There are a lot of good reasons to work with an employee benefits provider. Are you interested in learning more about how this switch will benefit your company and your plan? Review your options with one of our licensed advisors on the phone or in-person 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.