5 Tell-Tale Signs Your Company Needs To Evaluate Its Employee Benefits

About a year ago, my bathtub leaked and caused some minor water damage. I was busy and wanted this taken care of right away, with the least amount of inconvenience. So I hired a qualified contractor who quoted over $700 to fix the leak (not the water damage.) Don’t get me wrong – I knew his quote was high. But I also knew he could get the job done with little disruption to my schedule, as I did not have time to shop around, and I was willing to pay more for the convenience.

Fast forward to today. What would I do if I was faced with the same bathtub leak? Would I still choose to pay the higher price? 

In the current economic and business climate, the answer is a resounding "No." My priorities have shifted and saving money is now worth the disruption of shopping around.

It's the same with your company benefits. Through 2019, many small and midsize business leaders rightly chose to avoid the inconvenience of changing company benefits and paid more for their employees' health insurance. It’s was a worthwhile trade-off.

In 2020, can your company afford to continue paying inflated rates for health insurance?

Here are 5 tell-tale signs that your company needs to evaluate its employee benefits now:

 1.     You are worried that if your insurance carrier doesn’t come with the brand name “Aetna, Humana, BCBS, United Healthcare or Cigna” then the coverage is second-rate.

These major carriers are arguably the best – the Mercedes brand - because they have the strongest networks in most metro areas. They offer access to the broadest range of physicians, hospitals and pharmacies. I wouldn’t trade that either.

 What if I told you that these carriers rent out their networks to other insurance companies? And that you could get access to the same network of hospitals, physicians and pharmacies and also have plans that are equally rich, without paying the “Mercedes” price tag?

You may be pleasantly surprised to discover that there are carriers that rent their networks from these large insurance companies. These rented-network carriers have existed for over 15 years and can offer you like-plans and like-networks at a lower rate, without sacrificing quality.

2.     You don’t know what your competitors are offering, beyond the anecdotes.

What type of plans are your competitors offering their employees? How rich are their offerings? How are they contributing towards their employees’ medical costs? Do they offer employer-paid short-term disability?

Not knowing what your competitors are doing is akin to throwing a dart in the dark, hoping to hit the bull’s-eye. The world of work is changing and benefits benchmarking data will help you contain costs while still attracting and retaining top talent during this time of instability.

3.     You’ve been told that you should only change your company’s health benefits at the end of your plan year. 

Did you know that your relationship with insurance carriers is month-to-month and you are not bound to an annual contract?

The annual period only reflects the carrier’s obligation to maintain your rates but is not an obligation for your company to stay on the plan. If a mid-year change would cause you some inconvenience but could mean the difference between laying off an employee or two, or three, or not, would you consider it?

4.     You believe that partial self-insurance is dangerous for companies with less than 250 employees.

The benefits of self-insurance are no longer reserved for large corporations. There have been major innovations in the partially self-funded insurance space that allow SMBs to save money up front, while protecting against “shock increases” and stabilizing annual renewal increases.

5.     You haven’t evaluated your benefits broker in a few years.

In the world of benefits, what you don’t know can cost you. All brokers are not built equal. Their power comes from the tools in their broker toolbox and its important to evaluate what’s in their toolbox compared to other brokers. Failing to do so could cost you. 

I should mention that I am not a benefits broker and I do not sell insurance or make money from insurance. There's no one-size-fits-all solution to benefits. I help my clients objectively evaluate their benefits offerings to ensure the company gets a return on every benefits dollar.

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