Many times, when I am asked to review a benefit plan is because the plan isn’t working. This typically is because:
· Costs seem to outweigh benefit
· The plan isn’t performing as expected
Not unexpected, as these plans are analyzed a lot is revealed.
· They were set up with cost in mind, not claims processing
· There was a lack of long term planning
· There was no consideration of who the plan would serve
· It was an “in the box” solution, otherwise known as a A-B-or-C plan design
· There are no financial protections for employees
· Adverse selection has caused some people to be covered and others not
· A lack of policy contract adherence
· A misunderstanding of how insurance is priced
Good money down the drain
What is especially irksome is when you see a plan costing “X” amount of money each month, people are constantly declined their claims and yet administration are told all is well because the usage is below target and plan costs are not going up. Now I know that seems contrary to the goal of cost maintenance, but at the end of the day, if I am contributing to something month after month and I cannot access coverage, what exactly am I paying for. That to me is just as wasteful as cost increasing unnecessarily.
For instance, if a company pays (keeping the numbers absurdly low for ease of the example) $100 a month in premium and usage on the plan is sitting around 32%, not because the need for filing claims is not there, but because claims have been constantly declined reimbursement then that is not money well spent. That is a plan with an insurer who is reaping nothing but profits, knowing that the company will stay because the premiums haven’t gone up.
The cost of NOT working with me
When companies better understand what they are paying for and how the plan can be best utilized to improve productivity, build engagement and create a wellness culture where there is financial stability, then the money paid in premium is an investment into future profitability of the organization.
Let’s have a conversation.
Reach out if you would like to explore your corporate benefit options, like:
· Building “Best-in-Class” benefits
· Analyzing current coverage to ensure best match to needs.
· Flexible models best suited to various classifications of employees
· Using health spending accounts as the non-taxable bonus to align with the Group RRSP
Note: this was written without the aid of Artificial Intelligence (AI)
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