A quick primer on choosing a new employee benefits provider
Benefits 5 minute read

A quick primer on choosing a new employee benefits provider

Megan Orr | August 3, 2023

There are many different factors to consider when choosing a new employee benefits provider. Whether you offer benefits currently can play a significant role, as switching providers is more complicated than merely signing up initially.

There are different considerations for companies that currently offer benefits and those that don’t. Switching employee benefits providers can often be time-consuming, which is why many organizations will choose to endure a less-than-ideal experience rather than go through the process of selecting a new provider. Choosing a benefits provider when you’ve never offered health benefits to employees can be a complicated process and lead to choice paralysis. 

Things to consider for organizations that don’t currently offer health benefits

There are several different options to consider when you’re choosing a new employee benefits provider without pre-existing coverage. Among many options, you can work with an insurance company, an independent agent, a professional employer organization, or use a benefits administration platform such as Rise Health

Working with an insurance company often means working with what’s known as a captive agent: an insurance agent who is employed by that specific insurer. So if you’re working with someone from SunLife, for example, they will only be able to provide you coverage from SunLife. 

Alternatively, you can work with an independent agent who works with multiple insurers and will be able to provide you with choices. The disadvantage of working with an independent agent is that they often work on commission and are therefore incentivized to sell certain packages from specific insurers. 

The third alternative is to work with a broker, who you pay to work for you and get you the best deal possible. The downside to working with a broker is that they’re not likely to receive preferential treatment from insurers, as insurers generally prefer to work with their own agents. 

Organizations that prefer a hands-off approach to employee management may choose to use a professional employer organization or PEO. A PEO acts “as your entire HR department for a fee, handling needs like compliance, recruiting, payroll, onboarding, time and attendance, and benefits administration”. PEOs best suit organizations with 100 employees or fewer, as beyond that the cost may be too high to justify for most organizations. 

Benefits administration platforms are a great option for both organizations with and without benefits.

A more modern option, benefits administration platforms generally partner with insurers to bring employers a number of different options. Additionally, many benefits administration platforms are also HR softwares, which can save time and money with an all-in-one experience. 

Software review site Capterra recommends a benefits administration platform as the best benefits choice for the majority of organizations. They write: “Benefits administration software is the best solution to provide and administer employee benefits in-house if you have the staff to handle it, and are willing to do the due diligence to research and find a user-friendly system.”

Why switching employee benefits can be complicated

Many employers are reluctant to even consider changing their benefits provider, whether for a fear of the unknown or just a lack of resources. Here are some of the reasons that switching providers can be complicated. 

  • Switching can take a lot of time. End-to-end, choosing a new employee benefits provider is potentially time-consuming. From researching different options to exploring and deciding on coverage, and then the actual switchover and onboarding process, to training administrators and updating employees… the process can be lengthy but ultimately worth the effort.
  • Coverage plans may not always line up. Although there are some commonalities between most benefits carriers, it can sometimes be challenging to find a provider that matches up exactly with your current coverage. 
  • Getting everyone on board isn’t always easy. From executives to administrators and employees, you need to make sure that everyone is onboard for a switch in providers. Because of time constraints and concerns about coverage lapsing or changing, this isn’t always the case. 
  • Concerns about disruptions or changes to coverage. Employees may have concerns that changing providers will impact their coverage, whether that means that they’re worried about there being a pause in coverage while your organization transitions or that certain things that they need will no longer be covered under the new plan. 

Of course, when it comes to saving money and providing better benefits for your employees, these concerns are generally worth the risk. Especially considering that research shows that “77% of Canadian employees are ready to change jobs” for better benefits, with 60% of survey respondents willing to leave for better benefits, even if the pay is less.

There are some universal considerations for both organizations with and without benefits when choosing a new employee benefits provider. 

Here are some of the things that all organizations should ask themselves and potential benefits providers:

  • What is the cost per employee? Is there an implementation or onboarding fee? How do premiums work?
  • What is included and can we change our plan based on usage?
  • How is compliance handled?
  • What does support look like? What is the onboarding/implementation process?
  • What data will be available to us?
  • What does the service agreement include?

Rise Health is Rise’s group benefits platform, where we offer an all-in-one benefits experience. Additionally, you can get our entire platform for free, forever, when signing up for Rise Health. If you’re interested in learning more about how Rise Health can support your organization’s wellness, book a demo with us today.

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