Is this also known as “pass the buck”?
We seem to have developed an unhealthy methodology in the benefits world…pass the claim. There are multiple levels to choose from:
Level one:
An employer doesn’t offer a benefit plan to the employee, or limits coverage to employees assuming spousal coverage elsewhere.
The flaws in this strategy may include:
· Spouse works for a company utilizing the same strategy.
· Spouse may be unemployed, unable, or chooses not to work outside the home.
· Single employees do not have access.
Level two:
Benefit plan usage has soared over the last year and when the rates increase to accommodate the increased need, the employer:
· Reduces access to coverage
· Terminates the benefit plan entirely
· Switches insurer/provider
The flaws in this strategy may include, but are certainly not limited to:
· The employee is left with the “need” and instead of relying on the benefit plan, they are not out-of-pocket with the after-tax expense.
· Productivity may be hindered because the employee is not able to access the care and tools they need to be 100% on the job.
· The trust in the company as a whole is eroded because just when someone needs the benefits, they are reduced or removed.
· Employee may seek employment elsewhere where coverage forms part of the compensation package.
· Whenever there is a switch in insurers/providers there is typically a “loss” in some coverage options as the insurer/provider usually price markets to obtain the new business. This is otherwise known as “buying the business”.
Level three:
As above, the benefit plan usage has soared over the last year. The plan was “marketed” in an effort to secure better rates and due to known “risk” elements, no other insurer/benefit provider would assume the risk of claim. At this stage, some employers may embark in a combination of scenarios:
· Reduces access to coverage
· Terminates the benefit plan entirely
· Blame the insurer for charging too much for the coverage
The definition of insanity:
“Doing the same thing over and over again and expecting a different result”.
A better way
Doing something different—getting off the wheel—stepping aside of the next volley, means working with a strategic consultant. Our clients learn how to incorporate their benefit plan into the overall compensation and cultural fabric of the organization. We engage with employers and employees alike to show clients how to track and measure their “return on investment” by aligning the benefits with productivity. Only by approaching the Group Benefit Plan with an intentional tactical plan can the overall goal of offering a package in the first place be achieved.
We’d be pleased to engage in a meaningful conversation. Give us a call.
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