Top 5 Mistakes Business Owners Make when it comes to employee benefits.
Employee benefits are an important part of the compensation package for any employee. Today, more than ever, employees expect valuable benefits that are competitive with those offered by other companies operating in your market. Most candidates will ask about your employee benefits offering in the interview process, and not having a plan can impact your ability to hire and retain the kind of talented employees that will help you grow your business.
Once you’ve taken the leap and made the decision to research and implement an employee benefits plan, there are a number of factors to consider. Here are a few missteps you’ll want to avoid in order to ensure the value and longevity of your plan.
Buying on price alone – although it’s tempting to shop for a bargain, pinching pennies today can cost you in the long run. The cheapest plan may not include key features that could be important to you and your valuable employees. Furthermore, the plan that charges the lowest premiums up front for things like healthcare and dental benefits can also be the plan that is most likely to increase in cost come renewal time.
Choosing the wrong broker – unfortunately not all brokers who provide employee benefits are specialists in this area. A little research and asking some tough questions will help you along the way. Questions like, do you specialize in employee benefits? Which insurance companies do you represent? What can we expect in terms of service? What does you renewal process look like? The answers you receive will guide you along the way to making the right selection.
Not engaging your staff – surveying your staff about which benefits are important to them can assist you in putting together a package that has high perceived value. Although it may not be possible to please everyone, you’ll be able to make an informed decision about the types of coverage that matter most to your team.
Ignoring the benefits plan between renewals – we’ve all got a lot on our plates, and it’s easy to get caught up in the day to day responsibilities. However, it’s very important to continuously monitor your benefits plan to ensure there are no surprises at renewal. A good broker will be able to provide you with meaningful industry or carrier updates, as well as provide updated claims experience reports on a quarterly or semi-annual basis. Keeping an eye on your benefits and fostering ongoing feedback from your staff can help you get the highest return on investment.
Shopping/changing providers every year – if claims in areas such as healthcare, dental and short term disability are high in relation to the premiums you pay, it’s likely that you can expect an increase in rates come renewal. A common knee jerk reaction is to shop the market and find a plan that is willing to offer the same, or similar coverage, at a cost that is equal or less than what you are paying today. Generally speaking, you will have to pay for your claims eventually. Running away from rate increases by scaling back coverage or changing insurance companies are temporary solutions. In fact, the industry has recently tightened up and begun to make it more difficult to find alternatives if you’ve only been with your existing provider for 1 year. Working with your broker to negotiate and understand your renewal is key to the long term viability of your plan. Not to mention the fact that sticking with the same provider can save you lots of time and headaches!
Contact us today for guidance on setting up an employee benefits plan for your business, or to complete a review of your existing plan.
Norbram Group Insurance Benefits Inc.
1-360 Industrial Parkway S.,
Aurora, ON, L4G 3V7