As your business rolls into 2021, it is prudent to review your current benefits plan design to make sure it brings the most value possible to your employees within your budget.When your benefits-related costs increase, your employee’s perception of the value of those benefits doesn’t necessarily increase with them. What if we told you there are ways that you can increase the perceived value of your benefits plan while remaining conscious of your bottom line? Here are three tips to give your benefits plan a boost:
1. Introduce a Healthcare Spending Account (HSA)
A great way to manage the costs of your benefits plan while still providing value to your employees is through the allocation of your benefits. This means taking a benefit from your traditional plan that doesn't need to be an 'insured benefit' and transferring it into an HSA.
For example, let’s take a look at vision coverage. A common benefits plan will have $150-400 every 24 months to cover vision costs that extend beyond eye exams. If you’re already paying for vision coverage within your benefits, the cost per claim ends up being around 30% on top of the claim itself depending on your firm’s target loss ratio. We won’t dig into the math too much in this article to keep things light, but feel free to ask your HMA advisor to go through it with you.
By transferring vision coverage to your HSA, you're not only managing costs but providing more value and flexibility for your employees. If an employee gets $200 for vision and doesn’t wear glasses, they won’t see value in that portion of their benefits. If instead, an employee gets $200 in an HSA that they can spend on any CRA approved medical expense, they will find value in their plan without having to wear glasses.
Vision coverage is just one example to replace with an HSA. Contact our team of advisors to learn about more value of using a healthcare spending account with your plan.
2. Add an EAP (Employee Assistance Program)
Adding an EAP is only a few dollars/month per employee and it can help reduce absenteeism and provide support for personal and work issues so they are more present at work.
At a high level, an EAP helps your employees with counselling help for things like:
- Mental Health Counselling
- Financial Wellness Counselling
- Legal Counselling
- Other Counselling and Help Services (Ask your HMA advisor for more information!)
Depending on which carrier you use there may be a set number of hours your employees can use per year (around 8 - 12) or a predetermined number of sessions. The EAP provider will either help fix the issue at hand or provide a connection for long term support from a professional in a related area.
3. Go ASO (Administrative Services Only)
If you have over 25 employees and you are on a fully insured plan, it may be time to look into an ASO plan instead. In an ASO plan, you pay a premium to cover risk on the pooled lines (ie. life insurance, long-term disability insurance etc.), but you only pay for the actual claims with fees on your extended healthcare and dental benefits.
You can keep your current plan design the same, so there will be no impact on your employees by making the change. From the employer side, you are taking on some of the risk that the insurance company would take on in a fully insured plan. This can allow for significant savings on years with low claims. However, if you do have high health claims come up, there is stop-loss protection built into your plan fees which limits the risk to you as an employer.
If you want to learn more about ASO and if it’s a fit for your company, contact an HMA advisor today and we will be happy to help.