Do you ever wonder whether everyone in your organization is getting the same value from their group benefits? You design the plan, pay the premiums every year, and struggle when insurance companies raise their rates. All in the hopes that your team appreciates your effort.
But do they?
This question comes up all the time. Here’s an example of one company who took a hard look at the value they were getting from their group benefits.
Does the value of our benefits plan match the cost?
A very large, full-service RV company with over 100 employees asked us to review their group benefits. They had a plan in place already, and they were concerned about the increasing costs year over year for their health benefits. It seemed like every time their advisor visited, they got bad news – costs were going up!
Rising costs aside, the leaders at the RV company had two important questions for us:
- Is our benefits program treating everyone fairly?
- Are we paying for services we don’t need?
These are common questions. Most employers are keen to support everyone on their team and give them a full-featured benefits plan, but they also don’t want to throw money into a pit by paying for benefits that aren’t used.
With these questions in mind, we started our investigation.
Different ages and stages mean different benefits usage
As we analyzed the benefits plan, we learned that employees ranged from young, single, labourers to mature, higher income earners with families.
The company was paying the same premiums and providing the same health and dental benefits for both groups. However, the younger employees were not using their benefits as much as the older members.
It makes sense, doesn’t it? A typical young, individual just doesn’t have as many medical expenses as someone with a family.
A relatively healthy employee may make claims in only a few categories without using any of the other benefits. Imagine someone who gets a few massages and a dental checkup each year. They don’t get the full value of their group benefits.
On the other hand, an older employee with a family may have multiple dental visits, braces, visits to physiotherapists, and pairs of glasses to claim. They’re definitely reaping the rewards of the group benefits plan!
This traditional approach to group benefits puts some employees at a disadvantage.
The premium black hole
The other learning, which was no surprise to us, was that the health and dental premiums this company paid seemed to disappear into a black hole. They didn’t know if they were really getting value from them.
Whether employees used the benefits or not, the company still paid premiums. What’s worse, is that premiums went up every year.
What a waste!
A fair shake for all employees
So, how do you build a benefits plan that’s fair for all employees? By giving them more flexibility and ensuring no dollar goes to waste!
We recommended our HSA Rollover to solve the RV Company’s frustrations. An HSA Rollover is really two features in one – a Health Spending Account and a Group RRSP.
By contributing to a Health Spending Account for each employee instead of paying health and dental insurance premiums, the company can ensure that each employee gets treated equally – they all receive the same amount of funds.
Even better, there are no plan limits on how an HSA is used. Employees can use funds to reimburse the eligible medical expenses that matter most – massage, dental work, prescriptions, the list goes on! There is no risk of employees running out of room for a particular benefit. The only limit is the funds in their account.
But the best part of an HSA Rollover is the Group RRSP. At the end of a predetermined period unused HSA funds are reset and returned to the plan sponsor. We then help them invest those funds in a Group RRSP for their team. This way whether or not the employees have medical expenses they still get value from their employer’s contributions.
What did the employees think of their new benefits?
A benefit plan only works if the employees buy in and appreciate their employer’s contributions. We were invited to present this new option to the team. The vote after the presentation was one short of unanimous for this new, fair, group benefits option.
Now those that need to can use contributed funds for medical expenses. Those that don’t use them receive an investment in their future through the Group RRSP.
We can help you create a fair and equal benefits plan
If you’re ready for a group benefits plan that treats everyone fairly and ensures not a single dollar is wasted, then get in touch.
Our Growth Team and Advisor Nation are standing by to help build the perfect group benefits plan for you and your team!