What Do You Really Need From An Employee Benefits Provider?
Traditionally, if you wanted to provide your employees with benefits, you chose from one of the big insurers. They usually offered standard plans with little flexibility and low focus on service. If you were dissatisfied, you’d move to another insurer. Most have one thing in common: employee benefits are just one type of insurance they offer, and it’s usually a small part of their business. Their employee benefits products and services are often bundled into their other insurance offerings.
Obviously, this didn’t create a great employee benefits experience: too much outdated paperwork; huge bureaucracies; and clunky old platforms.
Fortunately, a new choice has emerged: firms that specialize in offering employee benefits, and only employee benefits.
What can a firm specializing in employee benefits provide, and why are they a better choice?
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
A specialized employee benefits provider focuses on the benefits experience. They are customer focused, not risk focused, and many have created online platforms (such as GroupHEALTH’s WEBS online) to simplify plan administration for employers and plan members. Their innovations include services like GroupHEALTH’s online enrolment tools, making it easy to change and upgrade coverages without having employees re-enrol.
Specialized employee benefits providers can choose the best products from a multitude of insurers. This means that if one product is a great fit and another product from a different insurer is a great fit, you can have both! No need to settle for something that doesn’t work for you, as you would with a single insurer.
The economies of scale that come through a specialized employee benefits provider can also help you save money. Because specialized employee benefits provider has a large block of business with their insurers, they optimize rates that are in many cases more competitive than if you dealt directly with the insurer. They’re also more efficient in administering the plan, allowing for reduced costs and greater efficiencies for employers.
Customer First Strategy
Finally, specialized employee benefit providers work for employers first, not insurers. If a current insurer isn’t a great fit, they can move to another insurer with little disruption. They’ll use their large block of business to get better coverages than dealing directly with an insurer.
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.