Employee benefits become a lot easier for business leaders to manage when a process is developed that takes the element of surprise out of the equation.
“When you don’t have control over your benefits, there’s going to come a time when you have an unwanted surprise waiting for you,” says P.J. Insana, partner at Britton Gallagher. “When you have that control, there’s not going to be that surprise. There may be times when you get bad news or bad information. But it doesn’t come at the 11th hour.”
Most businesses utilize a broker to identify the best insurance coverage and benefits plan for their employees. But these same companies often fail to take advantage of the services that a broker can provide to manage that plan throughout the year.
“When you buy something, you should take the time to understand how it works,” Insana says. “If you don’t get to it today, you’re going to eventually get to it, but you’re going to be rushed and forced into decisions that you don’t like. Take the time so you can control the process.”
Smart Business spoke with Insana about working with your broker to set up a process that manages your benefits plan throughout the year.
Where is a good starting point to understanding employee benefits?
The process begins with the first quarter of the year. Work with your broker to develop a strategy that helps you understand your culture. What are the dynamics and demographics of your employee population? What is your tolerance for risk, both on the employee and employer side? What is the budget for benefits?
Next you look at what’s been happening in your company. Has there been a pay freeze or a reduction in force? Have you implemented any new software with HR, payroll or other functions in your business? The goal is to gain an understanding of what’s working and what’s not working in your organization.
Based on that feedback, you put together a structure that takes these matters into account, and also provides a resource to employees to help them understand how their benefit plans work. You have expertise when it comes to running your business. Make the effort to bring the same level of expertise to your employee benefits.
What services can a third-party consultant provide?
As you get beyond the exploratory stage in the second quarter, schedule time for a consultant to come to your business and educate employees about how the plan works. Most people don’t realize that something as simple as a physical is provided at no cost to the employee. Maybe they don’t have details on preventative steps such as immunizations for children or other routine checkups or how a deductible works. Get this person involved and in front of your people.
Ensure there is support in the office every day and available via phone or email to answer questions that may come up. Have account managers in place who can speak to employees about the plan and knowledgeable consultants who understand the unique challenges of your business or industry and can help you come up with sensible solutions.
When you do all that, you’re driving the process instead of the process driving the plan.
How is the effectiveness of the plan measured?
In the third quarter of the year, you want to start to analyze data. Where are your claims compared to what was predicted at the beginning of the year? How does that stack up against your premiums? Do you have issues with things like diabetes or obesity or is there confusion with employees about prescription drugs?
If everything adds up as expected, you have a sense of confidence going into your end-of-year renewal discussion.
If by some chance the plan is not going well or you have concerns that a substantial increase may be looming, you have time to react and evaluate other options.
Managing the process throughout the year gives you the time to make informed decisions about your plan to determine its effectiveness. If it’s going to be your process, you should be driving it.
Insights Employee Benefits/Risk Management is brought to you by Britton Gallagher.
