There is no “right” or “wrong” answers, but there is trust.
Only the business owner and their human resource team knows their staff and the needs that “fit” within that organization structure. But when it comes to benefits, many overlook the essence of TRUST.
Consider how benefits must align with overall business schematic. A successful package forms part of the overall compensation strategy for attracting and more importantly, retaining top talent. It is a fact that a benefit plan also works to re-enforce the culture of the organization. Stands to reason then that there has to be a trust between the organization and its employees that the benefit plan will remain intact and be there when they need it.
Let’s be clear, insurance and benefit providers are FOR PROFIT organizations themselves. They too must be competitive. The market, underwriting, risk, specific customer requirements, amongst a multitude of other factors go into the pricing model. But at the end of the day, the purpose of insurance is to cover off the element of “risk”.
- Risk of loss of life
- Risk of loss of income
- Risk of a catastrophic event
Too often, corporations review their benefits package with an eye only on the dollars spent, viewing benefits as a commodity, rather than the important component of compensation, culture, and wellness that it is. Business owners are happy (and rightly so) to take the premium decreases when the usage—and NEED are low, and all too willing to remove coverage at the exact time that is it needed most.
We can agree that a corporation’s number one asset are their employees, so consider this from their perspective…in this example, they’ve been an employee for many years within the same organization. Until recently they only utilized the benefit plan sporadically, the occasional dental claim and a prescription here and there. Now, there has been a diagnosis within the family and part of their “coping” with this event is the fact that they know there won’t be an additional financial burden because they have “coverage” under the benefit plan.
Now, it is a year later and this employee has become a major participant in the claims utilization and the rates are going up as a result. When that corporation decides to carve back coverage a number of dominos fall:
- Additional cost burden on the employee who still requires the coverage in after-tax dollars
- Their salary has not been increased to accommodate this new cost burden
- The additional financial impact may distract from job performance
- The culture within the organization suffers because one of the incentives to work there (an industry key differentiator) has been removed
- Wellness of the employees has been impacted
Trust in the corporate structure has eroded because something promised has been removed
What would stop this employee from seeking employment elsewhere where they knew their financial and wellness needs would be better met?
What is the cost to the organization to replace this talent?
Is the cost of eroding compensation, culture, wellness, and most importantly the trust of the working family worth the dollars saved on a benefit plan? Only you know the right answer.
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