Choosing a health benefit plan for your business

Group health benefits build employee engagement

Group extended health and dental insurance plans are a must-have in today’s competitive job market. Having one will help you attract and retain qualified people, while keeping your employees healthy and productive.

Prescription drugs, paramedical services, eye care and dental work are expensive and are not typically aren’t covered under BC’s health care plan. For employees and job seekers, a health benefits package is no longer considered a nice perk, it’s the norm.

But how can a smaller business afford these plans? Fortunately there are cost-effective options that have been specifically designed for small to mid-sized businesses.

Know your options

Group insurance plans will let you pool resources with other like businesses and are typically the most affordable route. These can be obtained in a few ways.

One option is to go directly to the insurance providers. There are many high-profile national firms, such as Sun Life, Manulife, or Great-West Life, and there are a number of smaller insurance companies as well.

You could study each plan, sift through the many components, try and figure out which one is best for your employees and at what coverage level, then request quotes. But this is a time-consuming process and is likely not an area you have expertise in, making it difficult to make an informed decision.

Many small businesses also look to their local Chamber of Commerce. They may offer The Chambers’ Plan, pooling members across the country to achieve scale. Each Chamber provides a contact who can guide you through the plan’s options and costs. This plan is designed to be easily accessible; however, it may be less flexible and less comprehensive. And it’s not necessarily cheaper, depending on your needs.

The other option is to consult a specialist in this area. Here at BlueShore, we are well versed in group plan components and costs and can make unbiased recommendations based on your needs. We will then take care of getting quotes and help you select the best option. When it comes to renewal time, we also review any changes to premiums and negotiate on your behalf if need be.

Considerations for your plan

There are two key areas you need to consider carefully – which benefits you will include and whether the costs will be shared.

If your employee group is more homogenous – for example, mainly young adults – tailoring a group health benefit plan to meet their needs could be relatively simple.

But things get more complicated if your employee base is more diverse – young people with no children, parents, older employees focused on retirement. Cultural diversity can also impact staff needs and expectations.

This is where “co-insurance” or sharing the costs with staff can come into play. For example, your policy could cover 80% of basic dental, but only 50% of major work or orthodontics. This would help all age groups, but still assist specific employee groups with their needs. And it helps keep your plan premiums affordable over the long-term.

A growing trend is a more flexible plan that allows for customization. Basic benefits are provided, but each employee has a health spending account. Employees pick and choose what works for them, and can update their preferences from year to year as their needs change. 

Plan components

Here are potential components of a benefits plan:

• Standard health coverage, including vision, dental, and extended health
• A Health Spending Account (HSA) for employees to use on the eligible medical expenses they desire
• Wellness spending account – this taxable benefit provides an allowance for activities and expenses such as a gym membership.
• Coverage for catastrophic events such as critical illness, travel medical emergencies, group life insurance, accidental death or dismemberment, disability.

There are also a number of other benefits that you can consider offering that wouldn’t be part of your purchased benefit plan but would still be of value to your employees. These could include personal benefits such as professional development, employee assistance programs which include counselling, and new parent leaves. Retirement benefits are much appreciated as well, such as group RRSPs and pensions.

Cost considerations

Your premiums will, of course, depend on how many employees you have, whether they require individual or family coverage, which benefits are included, and whether you opt for co-insurance. Your industry sector will also be a factor.

How to keep renewal rates low

One justified concern of any business looking to develop a plan is renewal rates. Unlike personal insurance, business rates can fluctuate from year to year. Renewal rates are based on a combination of your group’s claims over the last year as well as those of your business.

It is, of course, impossible to control the health of each of your employees and their subsequent claims, but there are ways to keep your workplace a safe environment and combine that with a wellness culture. Employee well-being programs, whether formal or simply an in-house social committee, can go a long way to improving morale and overall wellness, which in turn affect absenteeism.

What many companies don’t realize is that you may be able to negotiate your renewal rates. Having an advisor on your side who has experience with the insurers as well as other companies in similar situations can provide the needed perspective to potentially reduce any unexpected and unwarranted hikes.

 Also, it’s often only after the first renewal that premiums experience any significant change. After that, premiums tend to stabilize.

What you should look for

Here’s a checklist of what to consider in your group health plan as well as the company or advisor that services you.

1. Comprehensive benefits that cover your employees’ needs
2. Flexibility and customization – ability to co-insure, HSA
3. Competitive cost
4. Simple to manage – spend less time administering the plan with fast set-up, easy-to-use forms, quick claims processing
5. Stability – does the provider have a track record of keeping premiums stable and predictable? The larger their pool of companies, the more stable the premiums.
6. Access to advisors – if you have a question or need to revisit the plan

The right advice makes all the difference

Our experienced, knowledgeable insurance specialists, offer unbiased, objective advice without any agenda – other than sourcing the best plan for your business. They'll look at which plans offer the best value for your organization and will help you examine and compare options, differences between fully insured versus health spending accounts, and other issues which could affect your employees. Together, you can build a cost-effective group health plan than works for you and your employees.