Group benefits are a key component of your company’s compensation strategy and can either be a deal maker or breaker in terms of attracting and retaining talent. If you’re shopping around for group benefits plans for your business, there are a few things you should know first. To help you navigate the employee health benefits space, we’ve put together a list of the top four things to consider when choosing a plan:
1. Your employee demographics
Did you know that, according to recent Sun Life Financial research, Gen Y doesn’t care as much about group benefits as the older generations? While all generations value dental and medical benefits as a general staple in their employer’s benefits plan, Gen Y workers tend to value paramedicals (such as RMT and acupuncture) and lifestyle benefits (such as lifestyle spending accounts and subsidized gym memberships) over others. Further, studies show that Gen Yers feel entitled to their benefits more so than their elders. In fact, Gen Y employees tend to make a point of maxing out their paramedical coverage.
As noted above, there are specific generational differences in preference when it comes to group benefits. Because of this, it’s important for you to take your employee demographics into account when shopping for a group benefits plan. For instance, does your company have a broad mix of age groups? If so, consider a plan that offers a healthy mix of dental, medical and paramedical benefits. Alternatively, if you happen to employ mostly millennials, you should look for a plan that offers more paramedical and lifestyle-related benefits.
To provide your workforce with the benefits they’ll actually love and use, you need to understand that each generation wants different things.
2. Your group benefits budget
The next factor you should consider when shopping around for a benefits plan is your budget. Some bare-bones plans may cost a mere $75 a month per employee, while others may cost upwards of $500 a month per employee. Think about how much you are willing to pay for employee group benefits and how much you can realistically afford. Your benefits advisor will be able to discuss these matters with you and help you find a plan that fits within your budget.
Expert tip: To cut costs, there are a few things you could look into:
A) Amend your co-insurance levels (co-insurance is the amount that the insurer will pay. For instance, if an employee makes a $100 claim, the insurer will pay $90 (the co-insurance) and the employee will pay the remaining $10).
B) Review your benefit maximums (this is the maximum amount you will offer for covering specific claims. For instance, if you find that no one tends to use their maximum of $250 in coverage for optical care, you could consider reducing the benefit maximum from $250 to $200).
C) Add deductibles (this option is not as effective and is not recommended, but it is an option.)
D) Get a second opinion on your current benefits coverage. To ensure you’re getting the most value out of your current benefits plan, it’s wise to ask a third party experienced advisor to audit your current plan and make suggestions for improvement. Contact Rise to learn how our fully integrated HR, benefits, and payroll platform can save you thousands of dollars each year.
3. The industry you operate in
Choosing which benefits you want to offer your employees can be daunting because there are so many benefits you could provide. One way to help narrow things down is to consider the industry you operate in and think about what employees in that industry might find most useful. For instance, if you work in manual labour, such as logging, mining or construction, you should offer long-term disability (LTD) coverage and short-term disability coverage (STD), as employees in this industry are more at an elevated risk of injuring themselves than, say, a retail employee. Note that STD coverage overlaps with Employment insurance (EI), whereas LTD does not, so if you work in manual labour and have to choose between offering LTD and STD coverage, opt for LTD.
If you work in a white collar industry and your employees have high-stress jobs (for instance, you run a law firm or a commission-based sales organization), your employees might appreciate having mental health benefits, such as employee/family assistance programs (EFPs) and paramedicals, such as coverage for seeing a psychologist, in their group benefits package.
Knowing your industry and the typical employee needs in that space will help you better determine a benefits plan that suits you.
4. The needs of your team
There are a number of areas you can offer coverage for in terms of group benefits for your employees. Typically, the types of insurance coverage you’ll find in any comprehensive benefits package will include life, AD&D, health, dental, short and long term disability, critical illness, EFAP (employee/family assistance programs), out of country, and plenty of other optional benefits. In addition to the above considerations we’ve outlined, it is recommended that you consult your team on what they would like to see in their group benefits coverage. Perhaps the majority of your team wears glasses or contacts? If that’s the case, they might ask you for optical benefits.
Expert tip: Since preferences for health benefits vary and can be quite personal, your employees may be shy to tell you directly what they want. An easy way around this would be for you to build an anonymous survey in which you can poll your employees on their coverage preferences without making it uncomfortable for them. Doing so will give you better insight when choosing your plan.
Now that you know the factors to consider when building or updating your company’s employee health benefits plan, you’re in a far better position to create a sustainable plan your employees will love and job candidates will vie for. If you have any questions about benefits plans or would like more info about how Rise can help you, get in touch with us — we’d love to hear from you.