The Blind Spot in Employee Benefits That’s Costing You More Than You Think

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For years, I navigated the treacherous waters of entrepreneurship as a freelance graphic designer without a life vest—or, in this case, without health insurance. As an independent contractor, I found myself in a precarious position: I had no employer-sponsored coverage, no safety net, and a daunting marketplace that made individual coverage not only confusing but costly.

In those days, almost 20 years ago, the quest for adequate health insurance was a serious struggle. I vividly recall the frustration of sifting through plans that were either exorbitantly expensive or offered coverage so bare-bones it hardly seemed worth the premium. It felt like a lose-lose situation—pay a fortune for decent coverage or risk financial ruin if a health crisis struck.

I did end up getting a plan at some point. Mostly for catastrophic care, but luckily, I never had to use it.

Some years later came a turning point. Like a big kid with a real job, I came to work for a company that prioritized employee well-being when it came to the benefits package, and I experienced firsthand what good health coverage looked like — within reason, of course. I’m pretty sure they all suck in one way or another. The plans were flexible, the quality of care was impressive, and most importantly, I felt that my employer genuinely cared about our health and wellness. It was a stark contrast to my freelance days, and it opened my eyes to what was possible in the realm of health benefits.

Of course, a few years later, I left that job and, with it, my cushy benefits. But it all worked out. I married a girl with a real job, so now I just glom off her for health coverage.

While the healthcare landscape has evolved since my freelancing days, many entrepreneurs and small business owners still struggle to provide adequate health benefits. As we delve into insights from Marshall Darr, a recent podcast guest and a leader in innovative health benefit solutions, it's clear how crucial it is for business leaders to understand and address these challenges—not just for the well-being of their teams but also for the health and competitiveness of their businesses in today's talent-driven market.

Marshall Darr: A Business Leader's Perspective on Employee Benefits

Marshall Darr's foray into employee benefits began with a straightforward observation: traditional health insurance plans were ill-suited for small businesses.

"I consistently heard that even the business owners who had the money to afford benefits would get overwhelmed and ultimately say, 'I just want to offer people the money and let them pick for themselves.'" - Marshall Darr

This motivated his mission to create a better way for companies to support their employees' health and well-being.

The Problem with Conventional Benefit Plans

Traditional group health insurance plans often entail high costs, limited flexibility, and administrative burden. They can also force employees into rigid solutions that fail to address their unique needs. Key issues with this approach, according to Marshall, include:

• Restricted Choice: Employees often face limited options, potentially necessitating changes in healthcare providers or compromises in coverage.
• Administrative Complexities: Managing enrollment and compliance can be time-consuming and complex.
• Cost Inefficiencies: Group plans are often more expensive than individual policies, particularly for smaller businesses.

Rethinking Employee Benefits: A Strategic Approach

According to Darr, leaders should be adopting more strategic approaches centered on flexibility, personalization, and employee empowerment. Things like:

1. Embracing Flexibility: Offer a range of benefit options, enabling employees to customize coverage. Consider providing pre-tax funding for employees to purchase individual policies or health-related services.
2. Simplifying Administration: Seek solutions that streamline enrollment and compliance. Partner with brokers or consultants for expert guidance.
3. Prioritizing Employee Needs: Regularly assess employee preferences to ensure alignment. Communicate benefits clearly and provide resources for informed decision-making.

Actionable Insights for Business Leaders

Based on his experience and the evolution of the employee benefits landscape, Marshall Darr offers the following advice for business leaders looking to improve their employee benefit strategies

• Start with a Clear Vision and Defined Budget:?Define your goals for employee benefits and how they align with your overall business strategy. Begin with a clear understanding of what you can realistically afford. According to Darr, some platforms do not require a minimum contribution, offering unprecedented flexibility. This allows you to tailor your contributions to fit your budget while still providing meaningful support to your employees.
• Seek Employee Input and Embrace Flexibility: Involve employees in the design and evaluation of benefit programs. Understand their needs and preferences to ensure your offerings are relevant and valuable. According to Darr, most small business owners want to provide funding and let employees make the best decisions for themselves and their families. Individual Coverage Health Reimbursement Arrangements (ICHRAs) allow employers to contribute to employees' individual health plans, offering a customizable alternative to group health plans. By giving employees the autonomy to select plans that best suit their needs, you foster a sense of ownership and increase satisfaction1.
• Simplify Administration and Ensure Compliance:?Leverage technology and expert guidance to streamline enrollment, compliance, and other administrative tasks. Darr emphasizes that small business owners didn't start their companies to manage health benefits. Explore solutions that condense the sales process into a shorter time frame with more flexibility, reducing administrative headaches. Darr's experience at Gusto and Decent underscores the importance of simplifying complex processes to enhance the workplace experience.
• Stay Informed and Adapt to Change: Keep up-to-date with the latest trends and innovations in employee benefits. Be aware of regulatory changes and emerging solutions like ICHRAs, which offer a flexible way to provide tax-deductible reimbursements to employees for their individual health insurance premiums. Consider the tax implications and compliance requirements associated with different benefit structures to optimize your company’s financial strategy and employee satisfaction.

In the complex and rapidly evolving world of employee benefits, leaders must challenge conventional wisdom and adopt a more strategic, employee-centric approach. As Marshall Darr points out, the traditional one-size-fits-all model often falls short, leaving employees feeling unsupported and undervalued. By embracing flexibility, simplifying administration, and prioritizing employee needs, companies can create benefit programs that not only attract and retain top talent but also contribute to a healthier, more engaged workforce.

Rethinking employee benefits requires a shift in mindset. It means abandoning the notion that benefits are simply a cost to be minimized and embracing the idea that they are an investment in your most valuable asset:?your people.?By empowering employees to make informed choices, streamlining administrative processes, and staying abreast of the latest trends and innovations, organizations can build benefit programs that truly make a difference.

Thanks for Reading. –R

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Ready for more?

Catch Marshall Darr’s interview in its entirety on Eggs! The Podcast.

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Reading list

Want to learn more about developing and applying grit and resilience? Here are some great books that will help you forge your path.

• "Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win" by Marshall Allen: A practical guide for navigating medical bills and advocating for fair pricing.
• "The Price We Pay: What Broke American Health Care—and How to Fix It" by Marty Makary: An in-depth look at inefficiencies in healthcare and actionable solutions for change.
• "The Art of Community: Seven Principles for Belonging"?by Charles Vogl:?This book, recommended by Alveda Williams, Dow's chief inclusion officer, offers simple principles for creating communities of belonging and is perfect for anyone looking to build a healthier workplace1.
• "The Hard Thing About Hard Things" by Ben Horowitz: Ben Horowitz’s book is a standout when it comes to the subject of leadership and focuses on many of the less-foreseen challenges that business founders and co-founders will face, such as how to systemize your business.
• "Traction: Get a Grip on Your Business" by Gino Wickman: This book focuses on organization, analyzing how clearly-defined roles for both managers and employees are essential to any future business success. Wickman's book is a manual on how to run your business and focuses on how clearly-defined roles for both managers and employees are essential to any future business success.
• "The Advantage" by Patrick Lencioni: Lencioni makes clear the need to define your values in the form of a playbook, which all employees can refer to. Making it clear why the business exists, your goals, and how they can be achieved is essential.
• "Leaders Eat Last" by Simon Sinek: This book delves into how leaders can build trust, foster collaboration, and create environments where employees feel valued and safe.

More to explore

Stretch Dollar: https://stretchdollar.com

Marshall Darr on LinkedIn: https://www.dhirubhai.net/in/marshalldarr/

Marshall Darr on Medium: https://medium.com/@marshalldarr

Work with me

Ryan Roghaar - Fractional CMO/Creative Director/Art Director: https://rogha.ar/portfolio

R2 - Creative Services for Agencies and SMBs: https://www.r2mg.com/

Eggs! The Podcast: https://www.eggscast.com/

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