The Value to a Company of Employee Benefits Plan
Employee benefit plans can be a strong attraction for hiring and keeping valuable personnel. When evaluating total compensation, employees look at benefits as well as pay rate. A comprehensive benefits package can be a decisive element in recruitment and retention.
While insurance benefits come at a cost, the cost of replacing high value employees and the loss of income related to the loss and replacement, can far exceed the cost of a good Employee Benefits Plan.
Benefit Plans: The Choices
There are many companies offering different plans, many with tiers and options, with their own proprietary names for different levels of coverage and options. Add to this voluntary additions, and you are looking at a lot of variables. And then there are qualifications such as pre-existing conditions, medical examinations) and some have maximum levels of payout which could be different.
Health care is a good example. Plans will vary in which services are covered and the percentage of coverage. Routine dental work, for instance, may be covered for 50%, 80% or 100%. If, however, an employee needs a bridge or a crown, the rate of coverage may be less. While prescription drugs are usually covered, what about chiropractors or massage therapists, and at what rate? Does coverage apply if the employee is traveling, especially out of the country? And what services are covered if they go to a hospital and how much is covered. Does it cover the employee only or their family?
Disability insurance is important and also has variables to consider. What is covered, for how long, and at what percentage of their normal pay is the employee covered? Is the coverage short or long term? Does it provide income protection and accidental death or dismemberment, amount of payout to family with particular qualifications?
And then there are life insurance plans, some with the ability to borrow and pay back (to buy a house for example). Are they fully transferable should the employee leave, and at what cost or penalty? Again, there are many variables.
And as if that were not random enough, most of these plans will have options where the employee can add to a policy at their own expense.
How Much is Enough?
The diversity of the plans makes comparing them difficult when trying to assess dollar for dollar value.
As to what to carry and how much is needed to help your business attract and keep the best employees, cost should not be the only factor considered. What is the usual coverage in your particular industry? What is the “norm” that is already expected? Should you match that or do you need to better it? If you have other attractive features such as proven rapid growth and therefore opportunities to move up, or you provide excellent training programs, matching competitors may be adequate, and you can still tip the scale in your favor. For a slightly higher cost you can increase the value of your benefits plan to really seal the deal.
One more item to consider. Some benefit plans require a life insurance plan to accompany the benefits plan. If you are shopping around you could end up paying multiple plans with overlapping coverage areas. When considering Business Insurance it is wise to look over ALL of the existing policies, number of employees, growth rate and both the company’s and the owners’ goals as well as the existing market. Winnowing down the number of different insurance plans to get comprehensive coverage with the fewest number of different plans can result in lowered costs while still getting all desired benefits. This can save a significant amount of money, reduce administration and generally simplify everything.
This is where an experienced insurance advisor can make all of the difference to getting you the coverage that will help you expand your business and stabilize your workforce for the least cost and administrative work.
For expert insurance services to ensure the best long-term care and benefits for you and your employees, contact us at Prosperity QB today!
