As a business owner, you’re regularly making decisions that affect the success of your company. How and where you invest your money directly impacts the business. For many businesses, money is tight and you can’t afford to do everything you want to do. If sponsoring an employee benefits plan falls under that category, there’s good news: you CAN afford to sponsor a plan.
Employee Health Benefits are an Investment
The whole idea of an investment is that you put out money on something expecting that you will get a positive return. Employee health benefits really are an investment. When you invest in employee health benefits, there are a number of positive returns you can expect:
- Healthier Employees – Providing your employees with access to a health benefits plan means they are more likely to obtain prescribed medication, visit the doctor and generally take better care of themselves. If sponsoring a plan leads to better health for your most valuable asset, that’s a pretty great thing.
- Higher Productivity – A by-product of having healthier employees is higher productivity. If employees aren’t plagued with physical and mental health issues, they can concentrate better on their work. This leads to better quality work and higher productivity.
- Attract and Retain Great Employees – Employee health benefits can be a great tool when recruiting new employees. The presence and quality of your health benefits plan can be a deciding factor for a prospective employee when choosing whether or not to accept a job offer. It can also help keep your current employees from finding work elsewhere.
The Right Provider
When choosing to sponsor an employee health benefits plan, it’s important to choose the right provider to purchase the benefits from. You need a provider that understands your goals for the plan and can work with your budget.
There really is an employee benefits plan for everyone, because the right plan can be customized to suit your needs and your budget. You need a provider who has the same philosophy about employee benefits and can design a plan based on what you need.
You also need a provider with a long-term approach to benefits. If you’re just dipping your toes into the world of employee benefits, don’t be fooled by rock bottom, ‘bargain’ plans that sound too good to be true. Unfortunately, they are. If the rates are too low when you sign on, at renewal you’ll be hit with a hefty increase. Instead, focus on sustainability.
Every budget is different, and if you’re grappling with how you can afford to sponsor a plan, cost sharing may be the answer.
Cost sharing means employees pay for a portion of the benefits, and you pay for a portion of the benefits. For example, you may cover 70% of the premiums for the benefits, while your employee contributes 30% via payroll deductions.
Cost sharing can also mean that you pay for the entire premium for some benefits, while your employee pays for the entire premium for other benefits. In some cases this might actually be beneficial for the employee. For example, if the employee pays for the entire premium for disability coverage, if they become disabled and receive disability payments, those payments would be non-taxable for the employee.
Cost sharing is very common – not every organization can afford to pay for the full cost of a plan. It also helps keep employees accountable for what they’re spending; when they’re footing part of the bill they’re more likely to consider lower cost options.
Optional benefits are another way to make sponsoring an employee health benefits plan affordable for your organization. You can sponsor a basic plan that works for your budget, then give employees the option to purchase additional benefits if they desire.
Optional benefits as part of a group benefits plan have more competitive rates as compared to seeking out benefits individually. In most cases there is also some coverage available with no medical evidence – this can be important to some employees.
Everyone has different wants and needs when it comes to insurance. If you budget doesn’t allow you to cover everything, optional benefits are a great way to support employees. This way, if an employee wants more coverage they have access to good rates and payroll deductions to pay for optional benefits.
Built-in Cost Containment
One very important way to ensure you can afford to sponsor an employee health benefits plan is to build cost containment into the plan. This means employing specific strategies for controlling costs that are actually part of the plan – not a band-aid fix after rates have risen substantially. Examples include:
- Smart Rx Solutions – Smart Rx Solutions are prescription drug coverage options that incorporate a managed formulary and/or a central dispensing pharmacy. A managed formulary means the plan will not provide full coverage for high-cost prescription drugs when there are less expensive (but equally effective) alternatives. A central dispensing pharmacy means prescription drugs are dispensed from a central pharmacy that couriers them out to the employee. Mark ups and dispensing fees are negotiated with the central dispensing pharmacy to help control costs. Both are very effective ways to support employees but also contain costs.
- Disability Management Services – Disability management services support your ill or injured employee so that they can return to work as soon as they are able. This shortens the disability claim period and helps employees feel supported as they navigate a challenging time in their lives. It also helps you plan for coverage and return to work during your employee’s absence. It’s a win/win – it helps keep the plan affordable and it supports employees.
- Employee and Family Assistance Program (EFAP) – An employee and family assistance program is a proactive way to support employees through many of life’s challenges. It offers free, short-term counselling, online resources and 24/7 access to help. It helps keep the plan affordable by allowing employees to get help for their mental health; this can improve productivity (because employees can focus on work), reduce sick time and lower disability claims.
How employees use a health benefits plan has a big impact on the cost of the plan. Educate employees on how their actions impact the plan costs. For example, many employees may not realize that the dispensing fee for prescription drugs varies widely depending on which pharmacy they choose to have the prescription filled at. Or that a brand name drug and its generic alternative contain the exact same active ingredients. They can make choices to keep plan costs affordable.
Good Advice is Key
Are you interested in sponsoring an employee health benefits plan, but don’t know how you can afford it? Have you considered all the positive returns you may enjoy if you sponsor a plan? Explore 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.